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The advantages of investing in multi-family real estate

Many New Jersey multifamily properties have great investment potential, and many investors prefer this type of real estate because it has a higher potential to generate long-term cash flow than a traditional, single-family property. Multifamily homes come in many types. Potential investors may want to explore the possibility of investing in a condo, apartment building, duplex or similar residential property.

According to Bankrate, there is a certain degree of work and effort involved in investing in multifamily properties. It is also important that investors determine if the properties they want to invest in are commercial or residential in nature. Typically, properties with four or fewer residences fall under the “residential” umbrella, whereas homes with five or more units are commercial properties. While multifamily properties tend to bring in more in rent than single-family properties, investors may also want to consider investing in multifamily real estate for the following reasons.

It may reduce an investor’s own living expenses

Many people who invest in multifamily real estate wind up living in one of the units in the buildings they buy. Doing so means the owner does not have to pay rent and may be eligible for owner-occupied financing, which brings with it a lower interest rate than, say, a traditional residential mortgage.

It is a low-risk investment

In comparison to other types of investments, investing in multifamily properties is relatively low-risk. People always need places to live, and real estate is therefore not as threatened by recessions as other types of investment opportunities.

Many people also choose to invest in multifamily properties because doing so is a quick way to broaden a real estate portfolio and build wealth as their properties appreciate in value.