Many first-time property investors believe their only way to earn a rental income is by purchasing a residential asset. However, this is not the case. Like the stock market, there’s a full range of income-building assets and structures to choose from.
As an accredited investor, you’re in the perfect position to take advantage of higher-level deals not accessible to your everyday investor—and one of the greatest assets for appreciation and income that investors opt for is multifamily property.
In this blog, we’ll look at the definition of a multifamily property, how to start investing in multifamily real estate, and a fund that’s created generational wealth for its investors by investing in multifamily real estate deals.
What Is Multifamily Property?
A multifamily property is a multi-housing property, i.e., a building with more than one livable space capable of housing several families separately. A classic example of a multifamily property is an apartment building.
Where an investor may purchase an apartment to rent out to a group of students or a single family, a multifamily property investor or capital group will buy an entire block of apartments and rent out the individual units to multiple individuals and families.
However, if the title-holding property owners choose to live on the property themselves, the property will be classified as owner-occupied and may incur different financing terms.
Typical forms of the multifamily property include:
- Duplexes
- Townhomes
- Apartment buildings
- Condominiums
Depending on the size of the asset, the mortgage conditions may change as there is still a considerable variation between the different types of multifamily properties.
What Are The Benefits Of Multifamily Property Investing?
While the ‘traditional’ property investing strategy may be appealing and provide educational opportunities, multifamily investing has some great benefits for high-income earners and investors looking for passive investment income.
Some of these benefits include:
Higher Cash Flow
Naturally, multiple tenants mean multiple rental payments—even when the occupancy rate is not 100%, monthly rental income is still not comparable to an individual housing unit. In addition, syndicators such as Viking Capital will look for value-add improvements to increase the property’s value and rental income.
Wider Tenant Pool
Housing is a fundamental need, and when you’re invested in an asset with multiple living spaces, you can access a broader range of residents. This strategy has the added benefit of protecting lower vacancy rates.
Portfolio Diversification
When times are tough, and inflation rises, savvy investors are grateful to have equity in a traditionally robust and inflation-proof asset. In addition, you’re accessing tax benefits and offsetting strategies.
Simple and Scalable
Multifamily real estate is a much more scalable strategy than a scattered real estate portfolio, as all the units are in one building, and the asset is in a precise location. As a result, you’re in much greater control. Or, if you invest in syndication, the syndicators can easily manage rent, upgrades, and money-saving strategies on your behalf.
Should I Invest in a Multifamily Property on My Own?
It depends on several factors, including your financial circumstance, real estate investing experience, and property management capacity.
However, without substantial capital, multifamily property investing may not be feasible as a sole investor.
Suppose you’re interested in the technical side of property investing, interested in multifamily, and would like to be hands-on. In that case, it may be better to go ahead and start with a duplex or small multifamily property while living in one of the units.
This approach can be an elite strategy to start small and learn as you go. However, you will not have access to the many benefits of multifamily investments mentioned above.
Why Should I Choose a Real Estate Syndication?
It’s a catch-22 situation in many ways. For example, physicians and high-income individuals have access to multifamily real estate investment deals due to their high-powered careers and accredited investor status. Yet, they don’t have the time to manage these assets daily.
Therefore, if you like the idea of high income from multifamily assets but aren’t interested in the duties of being a landlord or undertaking maintenance, then investing in real estate syndication is for you!
In the eyes of the bank, in many cases providing funding for a multifamily deal is better than a standard mortgage due to the higher income, traditional inflation-proof status, and more. That’s why many high-level investors and physicians opt to access multifamily deals through investment groups and syndications like Viking Capital.
Why Does Viking Capital Choose Multifamily Properties for Investors and Physicians?
Viking Capital is a real estate syndicator and asset manager that organizes profitable and inflation-resistant investments for accredited investors—we follow a proven strategy for creating generational wealth for our investors through carefully selected multifamily assets in attractive locations.
Our investing philosophy behind why we choose multifamily real estate is simple:
- We believe it’s the best way to build generational wealth for real estate investors (including high-level professionals and physicians).
- The benefits are monthly cash flow, appreciation, equity, and tax benefits are unmatched.
- It’s the most recession-resistant, risk-adjusted, and robust investment vehicle on the planet, and everyone needs a place to live. Moreover, during times of high inflation, rental demand increases as people delay purchasing homes and opt to rent for longer.
- Multifamily has a track record of performing well in adverse market conditions.
- It’s a hands-free investment strategy as physicians and busy professionals can maximize their income while leaving the heavy lifting to seasoned real estate fund managers.
- There’s a significant variation in the asset classes creating value-add opportunities and long-term high-yield options.
Multifamily Property Investing Is the Key to Future Wealth and Security
Multifamily property is much more than just an apartment block or duplex. When leveraged as an asset class, it offers accredited investors unbeatable benefits and a healthy cash flow. Best of all, when you partner with a trusted real estate group like Viking Capital, you’re accessing genuinely passive income by maximizing your high revenue with a skilled investment team.
If you’re ready to learn more about how multifamily real estate can create generational wealth for you and your family, reach out to the team at Viking Capital today.
