Are you planning on investing in multifamily Real Estate for the first time and don’t exactly know what you should be looking for when it comes to investing in your first property? No matter where you live, there is always someone out there willing to help you out. The process of buying property can become stressful, but knowing that by simply searching something as simple as Jim’s Conveyancing Services in Melbourne (if you live in this area of Australia), you’ll be able to get all the advice you need and finally get this part of your life back on track!
In this article, we will share with you several tips that you can use for acquiring your first multifamily rental property to add to your Real Estate investment portfolio.
Tip #1 – Where Is It Located?
The first step towards finding the right multifamily rental property is analyzing the location because that old saying of “location, location, location” when buying or selling a single-family home is also true when it comes to investing in multifamily Real Estate. No one wants to rent in an outdated and lacking area. People want to rent apartment in an area that has charm and charisma, somewhere they can enjoy their residency.
Ideally, you should be investing in a multifamily property that’s in town, or within one hour of a major town, near shops/stores, close to schools or a major university, and within a short drive of major recreation options. Although, Weichert Realtors – Coastal Properties may tempt you otherwise.
As a previous Stocktrades investor, you should also be searching for properties that are in high yield, high growth, well-maintained areas that are in demand or are rumored to be the future location for development by large corporations like Amazon.com.
Tip #2 – What Is the Total Number of Rental Units?
Once you find a great multifamily rental property the next step is to analyze the total number of rental units and the total number of rooms in each unit because this will also add to the desirability of the building itself and aid in keeping those units rented on a long-term basis.
More often than not you will find that most tenants are looking for 3-bedroom, 2 bath units so if you find a multifamily property that matches this criterion, and the building is in a great location, you may want to move forward with investing in that property.
Let’s say that you’re wanting to start small; in this case, you should consider investing in a multifamily rental property that’s either a duplex, triplex, or four-plex because these units are fairly easy for anyone to manage on their own while they are just getting started with owning multifamily rental properties.
Tip #3 – Verify the Potential Income
So, you’ve found a great multifamily rental property in a nice area that you’re excited about purchasing. Before moving forward with buying that property you should verify the potential income.
This tip is vital because even though the property may look great on the surface it could be in an area that’s not close to anything desirable and the building may have more vacancies than you know.
To verify the potential income, you should drive by other multifamily rentals in the area, speak with local property managers about what other buildings are renting for, and use the Internet to verify rents and prices of those buildings.
Tip #4 – Review the Costs
When buying a multifamily rental property, it’s also important for you to keep the costs in mind because financing the building may be different for you (depending on your credit score and finances) than it would be to finance a single-family residence.
Even though the financing side will be different, keep in mind that you may be able to qualify for owner-occupied financing if you decide to live in one rental while renting the other units out.
Tip #5 – Learn More About the Seller
Another important thing to do when buying a multifamily rental property is to learn more about the seller and their motivation for selling the property.
The property may be priced low but there could also be a story behind why the owner is selling for that price so don’t hesitate to ask questions before moving forward with buying a multifamily rental.
Tip #6 – Get Your Financing in Order
During the process of buying a multifamily rental property, it’s important for you to remember that financing is the same as buying a single-family home. You will have to have money ready for a down payment, a good credit score, and you should also be able to qualify for a traditional mortgage or FHA financing if needed.
Besides getting your financing in the order it’s also best to have one or more people that you can turn to for a co-signer (if needed).
Get Property Management For Your Multifamily Rental Property
For professional property management for your multifamily rental property contact Vestpro Residential Services by calling us at Vestpro Residential Services by calling us at (832) 971-1841 or click here to connect with us online.