Why a Multi-unit Design is a Good Investment Choice as Rental Property
Owning a rental property can be a good way to earn an income, as you can keep rent checks coming in while actually doing very little work, if you hire a property management company to handle all the paperwork and maintenance for you.
If you've thought about owning a rental property and are looking to choose between an investment house versus an apartment complex or a duplex, you might want to note why the multi-unit design is often the better choice. Consider the following.
1. You're almost always guaranteed more rental income
When renting out a home, you can only charge so much for the one unit, but when you own an apartment complex or multi-unit design, the rental charges for all the units combined is almost always going to be more than one unit. As an example, if you were to charge $2000 for a large rental home, but $800 for each apartment in a six-unit design, your monthly rental income is $4800 from the multi-unit. Even if one tenant moves out of the apartment complex, you still have five occupied units, for an income of $4000 every month.
2. Risks of evictions are spread out with a multi-unit design
When you own a rental unit, you may face the risk of having to evict a tenant for nonpayment or other issues. This type of process can be costly and if a tenant isn't paying their rent, you are losing that income. If you own a single unit home and need to evict that one tenant, you're losing all your rental income and won't have more rental income until the unit is re-rented.
With a multi-unit design, these risks are spread out over all the units. If you own a six-unit design, it's not likely that you will ever need to evict all six tenants at once so you're still earning rental income while evicting one tenant.
3. You could live in one of the units
One way to save money while earning money is to live in one of your rental units. While you are not earning rental income from the unit in which you live, you still have the rent coming in from other units and are not paying a separate mortgage for yourself, in addition to the loan for the multi-unit design. This can be good for someone just getting into the rental property industry, as you can purchase a duplex or triplex and live in one unit while collecting rent for the other units, and at the same time, get the firsthand experience of being a landlord.
For more info, contact local real estate experts to start the process.