Multi-Family homes have been a rising topic among real estate investors for many reasons, especially in Seattle areas such as Redmond, Bellevue, Kirkland, and surrounding areas. Despite this, many investors steer clear and instead choose to invest in apartments or commercial property, both of which can be profitable as well. However, multi-family homes have a lot going for them right now and as an investor you should be thinking smart and considering all of your options. Here are a few reasons why experienced multi-family property managers take the risk:
Multi-Families are a Good Investment
Anyone who pays any attention to the Seattle area housing market knows that condos and single family homes are on the way up, up, and up. The same can be said of apartment housing as well as condos. In fact, real estate statistics show that the average single family home is retailing between $186,000 and above $500,000 with a median price of $380,000.
Multi-family homes in King County however have a much lower median sale price of just 260,000 in most areas, although they can run higher depending on the area. This means lower cost of purchase, or faster return on income since rental prices are about the same for multi-and single family units.
Lower Management Costs
If you’re looking in to multi-family property management then you’ll probably notice one thing very quickly. Cost of management per unit is much lower than individual family homes. This is because multi-families are grouped together and therefore require less travel and expense to manage properly. While you might not get monumental savings on having your small multi-family managed, you might actually save a lot by having six or more units managed versus six individual homes. Added to the fact that those units are much cheaper to purchase, you can save a lot.
With single family homes you have to travel. It’s probably very unlikely that you’ll ever manage to get most of your homes on the same street, and maybe not all in the same town. With multi-family units, everything is right there together so it is easy to do repairs and maintenance. You can also probably have an easier time cutting a deal with a repair or service company because they only have to visit one area.
Less of an Investment Risk
Last but not least, multi-family property investments are less risky than single family homes. Why? Because you invest less money from the start so you don’t have to worry about losing as much. It’s also less of a risk to have a unit empty because chances are you already have other units full. You can also make money faster by renting out multiple units at once.
So what’s the bottom line? Multi-family units, like apartments, sell for less per unit but unlike apartments, don’t really sacrifice on size or cost of rent. For the savvy investor looking to grow, the multi-family is usually the way to go.
Need help with your multi-family property management? Contact SJA Property Management to learn more, or visit our services page.