fbpx

Multifamily real estate is known for being a significant investment vehicle with unique quirks and special considerations. For that reason, it’s essential to ensure every space, amenity and feature is up to your standards.

With that in mind, what you need to ask yourself is how to make a proper investment in rental property, since these are trending now that the pandemic situation is drastically changing thanks to the deployment of the vaccines. If you want the best ROI, you must factor in several key components.

Whether you’re looking to improve your cash flow from rental income or max out a building’s capacity, here are a few tips to help you find better rental property and real estate investments.

Aim to understand the real estate market.

Start small! Keep in mind that the more you scale, the more tenant requests you’ll need to address and the more responsibilities you’ll have to juggle. Real estate switches and shifts more quickly than you might suspect. 

Even if you’re going to hire a landlord, you still need to consider how involved real estate can be. While many real estate investors have the resources to fully outsource their property managers, landlords, and maintenance staff, other investors should consider starting small and scaling accordingly.

All of that does not mean you need to buy a single-family home as your first investment property, instead, you should start with a rental or multifamily property with a handful of units instead of hundreds. If you’ve never considered multifamily real estate before,  begin with something along the lines of a duplex. 

Starting on a smaller scale helps you familiarize yourself with charging rent, setting up effective lease agreements, maintaining renter capacity, and so on. Some beginning real estate investors even purchase a duplex or a similar type of property as a primary residence and rent out the other half! 

Though this type of investment isn’t for everyone, it’s an easier way to get into multifamily real estate and familiarize yourself with generating rental income.

Add more value to your properties

Whether you’re listing a vacancy in a vacation rental or you’re trying to encourage long-term leases, your investment opportunity can always grow or improve, mainly if it’s your first property. Some renovations, repairs, and replacements require a lot of time and enough money. Even if you have an existing relationship with a contractor, an individual property’s maintenance costs can start to climb a great deal.

The good news is that when you invest in your first rental property, add amenities, and improve the curb appeal, you can improve the property value, expand your operating expenses, and grow your own money. This can help ward off depreciation should it come time to sell. You can even note some energy-efficiency tax advantages, which are excellent ways for homeowners to save enough money for larger projects and purchases.

Beyond that, it’s a good idea for active real estate investors to do their due diligence to maintain any residential or commercial property, whether they own a condo complex or have vacancies in a commercial real estate space. It’s the best way to show prospective tenants that you’re invested in every property within your real estate portfolio. 

Upgrades, amenities, and repairs mean a great deal to a lot of people, so you must consider the different ways you can improve a home’s value and meet tenant needs.

Work with Professionals.

No matter who you are or where you come from, it’s always helpful to lean on industry professionals, especially when you think you’ve found the right property. There is a wide range of real estate professionals, from lenders to marketers who can help you navigate complex concerns surrounding rental income, payments, mortgage insurance, and other financial questions. 

Networking should be a core element of your strategy because it allows you to discuss with other professionals and experts in the industry about what makes a good investment and how to find property management services to help maintain your family homes.

Networking and working with professionals can teach you the basics about taxpayer guidelines, how to avoid bad tenants, and how to find long-term relationships with contractors. In addition, some investment firms, local real estate agents, real estate developers, and rental property investors even have connections to local services so that you can find a good deal on partnered contractors, tradespeople, and designers.

Many active real estate investment firms also maintain portfolios of similar properties that can help investors make the best decision for their multifamily housing strategies. From office buildings to mobile home parks, there are plenty of property types that can help you generate monthly income.