There are two sides to everything, including investing in multi-family properties. Wise investors take steps to educate themselves on the risks and the potential before plunging into a new real estate market sector. As your knowledge grows and you work towards diversifying your portfolio, it’s advantageous to have a bit of guidance as you expand your real estate investment business. Multi-family properties offer tax breaks for investors and, in general, are much easier to finance than single-family properties. To help you get started, we will explore the pros and cons of buying multi-family properties in Chicago.
Pros
Higher Profits
Let’s start with the bottom line, buying multi-family properties in Chicago increases the potential return on your investment dollar while quickly multiplying the holdings in your real estate portfolio. In addition, owning more units elevates your monthly income due to the more significant number of tenants. Lenders understand that multi-family properties generate a more robust and sheltered cash flow and offer competitive rates for these loans.
Occupancy Rates
Your current cash flow is more secure by buying multi-family properties in Chicago, which means there will always be money coming in; it isn’t likely you will ever be 100% vacant with multiple units.
Saving Time and Money
Buying multi-family properties in Chicago means that you handle several of your investments in one fell swoop. One loan process vs. several single loan approval is a time saver. In addition, your maintenance and repairs are easier overall. Because you are only working on one building vs. twenty different locations, it costs less overall to repair one roof, covering several units, for example, instead of several single-family homes located across Chicago. Additionally, hiring one property manager to handle all the tenants in one location makes fiscal sense with a higher number of units.
Cons
Higher Purchase Price
Naturally, buying multi-family properties in Chicago comes with a higher price tag. The downpayment lenders will typically require at least 20 percent of the purchase price, which can be a hurdle for investors. However, it is worth seeking guidance from a professional investor, like those at RB Homes LLC, who can help you assess the viability of your entry into the multi-family property sector and guide you in calculating the return on the investment.
More Tenants, More Issues
With more tenants come more headaches making the day-to-day management process more complicated when buying multi-family properties in Chicago. One of the issues is problems between neighbors when units are closer together and complaints about noise or other inconveniences such as parking space. Experienced and professional property managers such as those on our team at RB Homes LLC are worth their weight in gold.
Locating the Right Property
Due diligence is required when purchasing any real estate; however, when buying multi-family properties in Chicago, you need to have a full grasp of your budget and financial standing, the numbers on the property, and the condition of the property. Failure in any arena will quickly spell financial disaster.
Professional investors like those at RB Homes LLC understand the most critical factors in selecting the right location for your investment goals.
RB Homes LLC
At RB Homes LLC, our full-service team of highly respected pros can manage all of your investment properties while you relax and enjoy your passive income stream. The dedicated professional investors at RB Homes LLC always have your best interest in mind, keeping you up to date on market changes that could affect your investment strategy. At RB Homes LLC, our professionals can help investors buying multi-family properties in Chicago locate the best properties available. RB Homes LLC can also help you when it’s time to exit your investment property. Call RB Homes LLC at 773.893.0838. or send us a message to learn more.