Are you looking to diversify your portfolio but not sure what your next business venture should be? Interested in a slightly more passive approach to investing? If so, it may be time to look into a niche area of the real estate market. In real estate, you can either invest in single-family and multifamily homes. We’re going to discuss the benefits of adding multifamily real estate to your portfolio and the benefits of this investment opportunity.
What is Multifamily Real Estate?
Multifamily real estate is a property investment with multiple housing units. For example, an apartment or condominium is multifamily real estate option. Multifamily real estate can be a great investment for people who want to diversify their portfolios. Investing in multifamily properties will generate positive cash flow, provide asset appreciation, gain simple financing, and receive tax benefits. Think about it. With an on-site management team, multifamily real estate investments are a passive way to generate income quicker than with single-family real estate.
Understanding The Benefits of Multifamily Real Estate Investing
Positive cash flow
Multi-family real estate has more cash flowing in due to the higher number of tenants versus single-family real estate investments. With more tenants paying rent, it provides a steady, dependable income each month, which then produces positive cash flow for you.
Multifamily real estate provides superb appreciation in value over time, beating out many other types of investments. The net operating income (NOI) is calculated by subtracting the operational costs from the gross income of your multifamily property. Your NOI should improve over time depending on the rent price per unit and operational maintenance costs. Ensure that your property is maintained and managed well so it retains value and appreciates over time.
Real estate properties with multi-family homes are much easier to finance because they produce a much more consistent cash flow. This makes it easier to predict what your revenue is going to look like each month. Banks and other financial loan institutions view multifamily real estate as having less risk than single-family homes, therefore you will typically have an easier time procuring a loan. Not to mention, investors can purchase multiple units with a single loan.
When you invest in multifamily real estate properties, keep in mind a property management company will be handling all of the maintenance requests and managing tenants. It will be their job to keep the building maintained well, handle all daily tasks, and ensure tenants are paying each month. Therefore, multifamily real estate is a great way to generate passive income with your investment.
There are many benefits written into the US Tax Code for real estate owners. A couple of these include no limit on mortgage interest deductions, and depreciation accelerations, both will protect some of the cash flow that is being paid out to investors. Another key benefit is that the IRS allows investors, at the time of sale, a 1031 provision that allows them to exchange into a new investment property but defer any taxable gains into the future. Real estate depreciation and cost-segregation tax benefits make multifamily real estate an attractive option for investors.
Building Your Real Estate Portfolio with CorvoDirect
CorvoDirect is an alternative investment platform that gives investors direct access to individual investment opportunities, allowing you to review, compare, and personally choose the deals that meet your own investment criteria. Our managed funds and advisory services give you the same level of access, but we’ll handle the portfolio, making it even easier for you to invest.
It’s time to pull back the curtain on investing and find opportunities to bring you to the next level. Multifamily real estate investment opportunities can be a great way to increase your cash flow, diversify your portfolio with less risk and difficulty. Investing in multifamily real estate with CorvoDirect will give you:
- Unparalleled deal flow
- Rigorous review process
- Track record of success
- Expert investment team
- Investor support
Our experienced investment committee will help you navigate through the multifamily real estate marketplace. Formerly of Merrill Lynch, Coatue, SAC Capital, Citadel, Millennium Capital, Carlson Capital, BBVA, American Express, Bank of Montreal, UBS, Macquarie, Credit Suisse, and Citigroup, we’ll help you get to the next level of investing.