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Saturday, 10 November 2012 17:15

Investor Insight: Moving on up to multi-family

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Experts can talk all day about the benefits to buying multi-family properties over singles, but investors are often scared by the financing challenges and the condition of many of those apartment buildings. Should they be? Jemima Codrington reports.

 

Video transcript below:

Jemima Codrington: Making the change from single family investing to multi family investing can be a daunting task. But it also can reap the biggest rewards. We get the scoop on when and why you should consider multi family investing in this week’s Investor Insight.

Whether you are a novice investor or a seasoned pro, multi res has lots to offer.

Tarik Gidamy – TheRedPin.com
Tarik Gidamy: I think you can consider it at any stage. As a first time investor, it’s a great stable way to start earning income from day one, paying down your mortgage and getting a real feel for property and what you can kind of do with it down the road.

A lot of investors who buy multi res in terms of adding to their portfolio constantly, because they re-finance and do a lot of things, it’s definitely a great vehicle so that you can not pay capital gains and just keep something long term.

Jemima Codrington: The older state of some multi residential buildings coupled with the maintenance costs has some investors running scared. But those older gems may have hidden benefits.

Tarik Gidamy: The beauty of multi res is the fact that an investor can keep it and earn the cash flow and if they are content with the cap rate and everything else at the current moment, but also have that upside potential to be able to take tenants out, renovate, increase the cash flow, increase the cap rate and do that to the point where it becomes a great cash flow property, then re-finance and hopefully buy another one and do it all over again, it makes sense to a lot of investors.

Jason McGuire, Real Property Management Service
Jason McGuire: Investors start to consider multi residential investments when they have got little more of a serious cash flow with money to invest in these properties. They reduce your cost per door, which typically means greater return on your investment and it also mitigates your risk. You know, instead of having just one or two units with rent coming in, if you have got 10, 20 or 100, so if one tenant doesn’t pay rent, you are really in a better position really when you can afford some of the smaller hiccups we call them.


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