A multifamily home is an investment property with multiple separate units, each with its own legal address, kitchen, and bathroom. One family can reside in a single unit and may access it through a separate entrance. Multifamily units are usually self-contained. Examples include townhouses, condos, and duplexes. This blog discusses the key reasons to buy a multifamily property.
Primary Reasons to Buy a Multifamily Property
- Build wealth fast: Multifamily homes are ideal investment property. You can grow home equity pretty fast, starting with a two-unit property. This level of scalability is suitable for investors who aren’t ready to commit a huge financial investment in real estate.
- Cash flow: With a multifamily property, each unit generates monthly income. Rental income from the units can contribute to your mortgage payments, easing your financial burden significantly.
- Easier mortgage management: You may acquire a multifamily property with just a single loan. Suppose you were to buy several traditional homes with the same income potential as the multifamily property. In that case, you’d typically need different loans for each, and managing them can be complicated.
- Tax benefits: Acquiring multifamily real estate could provide multiple tax deduction benefits. Opportunities to reduce your tax bill with this type of investment include expenses such as building maintenance and upgrades, property tax, and insurance. Depreciating rental properties is also a potential area to qualify for tax deductions.
- Safer investment: As with most real estate properties, multifamily home values are slightly more stable than stocks and other investment options. Inflation doesn’t impact their value as much as it does stocks, so they’re a reliable source of long-term financial stability.
- Diversity: There are different types of multifamily properties you can buy to build wealth. Besides duplexes or triplexes, you could invest in newly renovated apartment buildings or value-add multifamily complexes.
- Early property management experience: Even if you only own a two-family investment property, for now, managing tenants, leases, maintenance, and other issues provides significant real estate management experience.
Explore Multifamily Unit Residential Loans at Fidelity
What’s stopping you from leveraging a multifamily investment property to build your wealth? If the lack of affordable financing options with fair interest rates is your main obstacle, worry no more because Fidelity Mortgage Lenders always prioritizes your financial situation. Whether you’re looking to buy a duplex or an apartment building, we can offer you a custom residential loan to suit your unique needs and real estate investment objectives. Contact us today to learn more!