If you’re a homeowner and a businessman at heart, buying a multi-unit property must have crossed your mind a few times. It’s a popular investment option, especially to people who have a long-term plan of leaving the 9-to-5 routine and spend more time at home. It makes sense because whether you rent it out or sell, profit will come to you either way.
It has worked for many families, and with an FHA multifamily loan, it’s much easier to finance your project (if you qualify). There’s also the benefit of you being able to keep an eye on your investment, unlike in stocks, bonds and other sectors where you’re at the mercy of your agent.
In short, it’s a good investment opportunity. But, be warned that buying a multiplex is buying a business. Like a business, you need to give it your effort and time to ensure a timely return of your money.
A Good Idea, If…
Assuming that you’ll be occupying the multiplex, you assume many responsibilities as the owner-tenant. Unless you’re planning to outsource the work, these duties fall under you:
- Resident handyman – to fix various things, such as a broken stuff around the property.
- Being accommodating – you’ll encounter all sorts when renting a property, so be ready to encounter people with different lifestyles.
- Tenant first – if you have something to fix, it comes first then your plans.
- Renter’s Rights – All else you need to do fall under this one, and though it will get in the way sometimes, it’s to protect landlords from kicking tenants out for no reason.
Most importantly, you have to give it your time, probably a lot of it. This is one of the risks being so near your investment, that you’re solely responsible if it does good or not. The assurance you can give yourself is unlike anything, but be ready to deal with problems frequently.
A Roof Over Your Head and Food on the Table
Despite all these things, which are unavoidable in running a business, this is a win-win situation. You have a home, you’re your own boss, and your profit potential will only increase in the long run. The bigger the property, the more you will earn.
Investing in real estate, especially multiplexes, opens possibilities. This could be the start of a portfolio of properties, and if not, you can always hire a property manager while you enjoy the fruits of your labor elsewhere.