PROs & CONs of Multifamily Homes

by Mary Anne Ragragio


Posted on 2019-09-04 20:17:01


Pros and Cons of Multifamly homes.PNG

 

 

PROs & CONs of Multi-family Homes

 

There are lots of pros and cons of having a multi-family investment property. To make sure you are making the right move, it would be good to familiarize yourself first with the pros and cons of investing in multifamily homes before you start doing so. In this blog, we will talk about some pros and cons to help you with what you need to consider.

 

And before we talk about the pros and cons that a landlord might experience in investing in a multifamily home, we need to know first what a multi-family home is. From the name itself, it is a multi-family residential and is a category of housing where multiple separate housing units for residential occupants are within one building or a number of buildings within one complex. It consists of two or more units under one roof. Units can be next to each other or arranged on top of each other. If there are Pros of investing in multifamily homes, there are also some cons that we need to consider.

 

The Pros

 

  • Potential for increased cash flow. If you have multiple rental units in one property, it means you are getting more cash flows. Let us say you are paying a mortgage, and the mortgage’s cost every month is $2,000, and you are renting out 5 units. Maybe 2 out of the five units can already cover payment for the mortgage and other expenses of your rental property. So the more units you have, the more potential money you can earn.

 

  • Less risk of getting zero income. When you have a single-family property and become vacant, you earn nothing for the time being that it is vacant. While if you have multi-family units, when one is vacant you still earn from the other active units that you have.

 

  • There is no yard to be done in each rental until. This will save you time and money.

 

  • It is more convenient to manage a multifamily property than having multiple single properties. Because repairs and improvements can spread out since it is located in one location.

 

 

The Cons

 

  • Noise is one of the most common complaints that tenants raise to their landlord or property manager. There are complexities that might arise since units are close to each other; for example, if one of your tenants is really noisy, the other nearby tenants may be disturb or annoyed due to the repeated noise. It can be difficult to control the noise especially if the landlord does not live in the property. But it is still the landlord's responsibility to check on the situation and take the necessary action. Noise violations should be part of the lease, if the tenant continues after you confront them, remind them that it could be a breach of their lease agreement. 

 

  • Tenant turnover is what landlords concern sometimes in rental properties especially in multifamily homes because there is a cost associated with turnover in rental properties. There are some things that you can do to reduce the chance of frequent turnover of your tenants:
    • You may conduct a thorough tenant screening. It is an important feature of property management. Tenant screening is something that you can do to help you reduce the chance of frequent tenant turnover.
    • Well maintained property can make your tenant happy and stay longer. Basic ideas to help you keep well-maintained properties are:
      • Regular inspections of both inside and out of your rental unit.
      • Keep your tenants happy by giving them a token of appreciation, create a summer picnic to make them feel like a family member and build a good relationship, offer a renewal gift or provide a one-time discount on rent.
      • Follow the landlord and tenant law. This will help you manage the property well to avoid a bigger problem in the future.
      • Consider a renovation and improvement. Tenant sometimes expect for new development in the property. It will not only help attracts tenants but will keep tenants stay as long as they can.

 


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