Despite the benefits of owning duplexes, fourplexes, and various other plexes in Novi, the average real estate investor only owns two rental units. If you take into consideration all of the landlords that manage properties with eight, ten, or even more units, that means many investors only have one property!
One of the most significant roadblocks to multiple-unit ownership is the cost of acquiring more than one property. When you pile the hassle of managing multiple properties on top of that, the challenge becomes insurmountable for many investors. Investing in Novi multi family homes may be one of the easiest ways to overcome these and other challenges.
If you only have one rental property, multi family units may be the easiest entry point to doubling, tripling, or quintupling your investment income. If you’re on the fence between purchasing a single family or a multi family unit for your Novi portfolio, you may want to give these productive assets your time. Here’s why.
Use Them to Enhance Cash Flow
- The economics of Novi multi family homes make them a compelling investment.
- When you combine several rents under one roof, the increased income adds up quickly.
- Buying a duplex, for example, puts you in a position to get a far bigger bang for your buck.
The average sale price of a single-family home in the United States $243,225. On the other hand, the average cost for a duplex is $401,148. If each property earned the same rent per unit, you earn considerably more in income by purchasing a duplex instead of a single-family home. Naturally, the math gets even more attractive as you increase the number of units per property—part of the reason is it costs less to build each unit.
Linked Expenses Mean More Profit
- Some of the most expensive facets of any construction process involve building the foundation, connecting the utilities, and constructing the roof.
- With Novi multi family homes, these expenses are effectively shared between the units.
- All have the same foundation, roof, and primary utility hook-up to the town’s power, water, and sewage.
- Even though they will have their own electrical wiring and plumbing, the main connections to the street are shared. Furthermore, each unit shares the same lot and landscaping.
What does this mean for you as a landlord? Ultimately, it equals budget and time savings. Consider an example of this in the form of your marketing efforts: sure, you might have to make individual listings for each unit in a fourplex. However, many of the elements of the listing will be the same—and you'll really only need to make signage for one location. With individual single-family properties, your marketing efforts start to get costly.
Start With a Property Management Company
Understandably, investing in Novi multi family homes can get complicated—particularly when it comes to managing your rentals. Each tenant is going to have their own needs, and adequately meeting them is a fine art that takes time to develop.
- A good property management company has years of experience with helping investors like you find the right renters and keep them smiling.
- They can also assist with some of the more nuanced aspects of marketing your property—as well as helping you handle sensitive situations like evictions.
- With a property management company on your side, you have less work and a reliable income stream.
There are always risks involved when investing in real estate—whether single family or multi family. However, the risks are lower if you own multiple units as part of a single holding.
- If a single-family home has one unit empty, your occupancy rate is 0%.
- With multi family homes, each unit serves as a buffer against a low occupancy rate.
- The chances of the property generating income increases in proportion to the number of units.
Multi Family Homes Require Less Time
Managing your properties comes down to a few crucial components: two of the most important are the tenants who call your property home and the property (or properties) in question. Each requires time to determine if they are fruitfully producing income to put towards your financial goals.
However, if you have multi family property, the time you spend taking care of your building and its surroundings is effectively divided by the number of units you have. In reality, with one visit to the property, you can take care of several issues at once. Also, if one issue is impacting more than one unit, you can walk away from your visit with multiple satisfied customers. When you invest in single-family homes, on the other hand, you have to shuffle from one property to the next—putting out fires along the way.
Not only is this stressful, but it’s inefficient: you save valuable time when you have several tenants under one roof—all of whom can be made happy from an attentive visit. When you pair more income with less risk, time, and costs, you can see why a multi family home brings considerable value to your portfolio.
Even though it may seem daunting, if you're interested in expanding your portfolio through multi family units, it's 2020! There's no need to do this alone. As an expert in Novi multi family property management, we're here to be your guide! Learn more about what we can offer investors looking to grow.