Multifamily Loans | Benefits of Buying a Multifamily Home
What is a Multifamily Home?
A multifamily home is a building that contains multiple residential units, such as a townhouse or apartment complex. Multifamily homes house several different tenants or owners.
What are the Benefits of Buying a Multifamily Home?
Although it may be costly up-front, there are many reasons as to why someone would buy a multifamily home. One of the most popular reasons is for an investment opportunity.
Generate Steady Cash Flow
When you purchase a multifamily complex, you may rent out the unoccupied units to generate additional income from the unit’s monthly rent.
Expand your Investment Portfolio
Invest in multiple units at a time to expand your investment portfolio while only getting one mortgage.
Hire a Property Manager
If you are generating steady rental income, it may offset the expense of a property manager. Hiring a property manager will make it easier to maintain and manage the property.
Have Closer Proximity to your Tenants
If you choose to live in the multifamily property that you are buying, you will be neighbors with your tenants. The proximity to tenants may help make the property management process more manageable, as you will not have to travel far if a problem arises.
Focus on Improving the Property’s Value
Over time, you can do minor improvements and renovations to the units to try to increase the overall property value. Also, increasing demand and rising rents may naturally increase the value of the property.
What is the Process of Financing a Multifamily Home?
When you purchase a multifamily property, you obtain one mortgage for the entire complex. The multifamily complex must have between 2-4 residential units to receive mortgage financing. Any complex with more than 4 units would be eligible for a commercial real estate loan.
Multifamily loans may differ from one another according to your intentions of using the property. The loan term, rate, and fees may vary depending on if you are purchasing the multifamily unit for investment or personal-use purposes.
Benefits of Financing a Multifamily Home with GuardHill
GuardHill has extensive experience in helping our clients secure multifamily loans for small and large properties. We also strive to guide and advise our clients on best practices for expanding their investment property portfolios. Get in touch today to learn more or get started!