Why Invest in Multifamily Homes Instead of Single-Family Homes?
Anytime you are considering owning a rental property, you are going to be confronted with the choice of single-family or multifamily homes. If you are planning to build a real estate portfolio meant to generate rental income, than it is always going to be better for you to have multiple tenants. In addition, multifamily properties provide more stable income and returns than other types of commercial real estate.
Top Reasons Why You Should Build an Apartment Complex
The final question that people are left wondering is whether they should build or if they should buy the property that they are planning on renting. Let’s take a look at exactly why building a new apartment complex can be the right move.
You Will Build Long-Term Equity
Of course, you can build equity when you are the owner of an apartment complex that you bought instead of built, but you will build more equity if you are the original owner. As buildings change hands, the rate that they appreciate in value decreases. Since you are the original owner you will be able to easily claim 100% of the value that the property has generated.
You Get to Choose a Location
This is probably the single biggest reason to go with building over buying. The reason is there are a ton of quality apartments that simply are not in the right location. It does not matter how nice the apartment is if there are no customers you will not generate any income.
Full Control over the Building Process
If you buy an apartment complex that has already been built, then you are going to be stuck with whatever is there when you get it. If you are going to go through the process to build a new one, you will have full control over the entire building process. They can be made exactly to your specifications.
You Get to Set Your Own Rental Rates.
This is another big one for the property managers out there. When you are the builder of your own apartment complex, there are no tenants that have been in living in there, previously who are used to paying a particular rate every month. You will get to set the rate for the very first tenet that moves in and this will set the tone for every tenet that follows. Ultimately this can be the one reason that you end up making significantly more money, in the long run, is to build your own property instead of buying one.
Final Remarks on Building an Apartment Complex
Although it may be a little more expensive and it is definitely more time-consuming to build a new apartment complex instead of buying one, there are still a ton of benefits. You will have far more control over the end result than if you had bought an apartment complex that was already built. You will get to choose what the tenants pay whenever they are living there starting from the very first tenet and even get to choose where the apartment building is located so you can choose the market that your customers will be coming from.
