Marketing Tips for Multifamily Investments

Multifamily properties are an attractive opportunity for investors because they provide a chance to earn reliable, predictable income. The investment structure also offers decent tax benefits.

There are two different types of multifamily investments: commercial and residential. Commercial multifamily investments include apartments, hotels or motels, or office buildings. Residential multifamily properties include duplexes, condos, town homes, senior citizen homes and a host of other single family dwellings. Regardless of the type of multifamily property you choose to invest in, there are some essential things you need to do before you buy a multifamily investment property.

Marketing is an essential part to your multifamily investment properties success. While it is important to have a good property and location, marketing your home right is just as crucial to its sale. Not everything works for every property; therefore, it’s important to figure out what does and doesn’t work for the home you have. Use the tips below to create a multifamily investment marketing plan that helps you sell your home faster

Tackling this type of investment, however, can be a large undertaking. It's important to consider the characteristics of multifamily properties and the needs of residents before making a purchase decision.

Here are some questions to consider:

What is the multifamily market like in your area? Some areas have housing shortages and are seeing strong growth in this sector. In other areas, you might find it difficult to find as many units to purchase or rent out.

What type of property makes sense? Apartment buildings are most common, but single family homes can be a good option if you're looking for something more private or manageable.

What kind of financing should you use? Consider using mortgage notes or seller financing, which lets you use cash flow from rental income to pay off a loan over time. You may be able to use existing buildings and improve them over time with a low-interest loan.

Who is going to manage the property? If you want to focus on other aspects of your business, hire a management company that charges an annual fee rather than taking part of profits. This can free up your cash

Marketing Tips for Multifamily Investments

-Attraction Marketing: Put the most money into getting the right tenant versus less money on repairs

-Agent Marking: Be sure to capitalize on your agent’s sales skills by providing them with proper training

-Marketing Strategy: Figure out ways you can stand out from the competition.

Why invest in multifamily properties?

Multifamily properties offer a number of advantages over single-family homes, including the ability to generate income from multiple sources. There are many reasons why you might want to invest in multifamily properties. Here are some of the most important things to consider.

Multifamily Properties: Advantages

1. Multiple Rent Streams

One of the biggest advantages of investing in multifamily real estate is that you can generate revenue from multiple tenants. For example, if you're renting a two-bedroom apartment to a single renter, you'll receive rent for only one unit. However, if you divide that same apartment into two units and rent them both out, now you have two streams of income from just one asset. This is beneficial because multifamily properties are typically more expensive than single-family homes, so having more tenants can help offset expenses.

2. Less Management Required

Another advantage of multifamily properties is that they require less management

3. Multifamily properties provide strong returns on investment.

According to the National Association of Realtors, as of 2016, the average return on investment for single-family homes was 5 percent and 7.7 percent for two-to-four family homes. By comparison, multifamily properties always yield a higher return on investment than single-family homes because they can be split into individual units and rented out separately. Additionally, you can take advantage of tax breaks such as depreciation deductions and favorable loans that reduce your tax burden and increase your cash flow.

4.Construction costs are lower with multifamily housing.

Building multifamily housing is generally more cost effective due to economies of scale when it comes to purchasing materials, hiring labor and managing projects. The construction costs associated with a single-family home construction will be multiplied when building an entire project, which increases the overall income potential for multifamily properties versus single-family homes

Key aspects of Multifamily Properties

As with any investment, it's important to consider the market conditions before you jump into a new venture. For multifamily properties, there are some key aspects to look at:

Location – A property's location is one of its key features, so take the time to consider what makes a good location for rental properties. You'll want to find a neighborhood that is growing and has plenty of available amenities nearby. A property in an area that is seeing rapid decline might not be the best choice.

Logistics – What kind of access do tenants have to their place? Will they need to travel through dangerous neighborhoods or cross major highways? When considering multifamily properties, think about how tenants will get to and from the building. Think about how easy it will be for your tenants to move in and out, as well.

Property Value – How much would you have to pay for the property? Does it have good resale value? Has it

Like single-family homes, multifamily properties are a great way to invest your money. They can offer very steady returns and help you achieve your financial goals. But they have unique risks and benefits unto themselves, including the chance to diversify your portfolio so you aren’t placing all of your investment eggs in one basket.