July 11, 2023
Factors to Consider When Choosing a Multifamily Property
Location and finance are key—an essential phrase to understand once you step into the realm of Multifamily property investing. Choosing to begin or continue your multifamily investment property portfolio is an impeccable choice that will offer you incredible short- and long-term benefits. However, determining the correct property for you, your portfolio, and your vision is no easy feat. That is why the expert team here at The Multifamily Firm has compiled our top factors you should consider when choosing a multifamily property to make a well-educated investment decision.
What To Look For In A Multifamily Investment Property:
Location Of The Property:
The location of your potential multifamily investment property is one, if not the most important, aspect of your buying process. This is because you want a space that will appeal to renters and tenants. Look for a location that is safe, well maintained, trustworthy, has a good reputation, and an area that is both high-growth and high-yield, bonus points if the site is in high demand. Other factors to consider in this process include the location of the properties, crime rate, amenities, school ratings, public transportation access, etc.
One of the next important aspects of finding an investment property is determining the income that the property you are looking at can accrue. The most common rule of thumb is the 50% rule. As an investor, this means you should spend 50 percent of an investment’s income on expenses rather than the mortgage. When determining the rental prices and income, multiple resources, sites, and industry-trained professionals like the team at the Multifamily Firm can help you verify rental prices and incomes for the property.
Size & Number Of Units
Once you have determined the size and potential income, another aspect of the property to consider is how many units are on the property and how many rooms are within each unit. This is an important factor to consider as the more units you have equals the potential for more cash flow, but it also means you will have more units to take care of. We recommend that you base your unit number on your level of investing experience and stick to what you feel comfortable with.
The Overall Building
Other than determining the square footage, number of units, and size, it is important to look at the property’s overall condition. Take a deep look for any mold, fire, and water damage. But also take a look at the smaller details. This includes siding, insulation, window quality, wiring, etc., all things that can cause higher expenses based on their quality and efficiency. You can use this investigation to factor in your overall purchase price as well as to determine any necessary repairs, fixes, or maintenance.
In Search Of A Multifamily Property? Contact The Multifamily Firm Today!
The Multifamily Firm is a premier investment real estate brokerage exclusively focused on the disposition & acquisition of multifamily properties. Based in Sarasota and Tampa, Florida, the firm is strongly positioned at the epicenter of economic growth and activity on the West Coast of Florida. If you are looking for a multifamily property, please feel free to contact us via our contact form or by calling us directly at 941-444-6160. We look forward to speaking with you soon!