If you’ve been thinking of investing in real estate, now is a great time. While it is still considered a seller’s market, the cost and demand for rental units in the Greater Nashville area has continued rise. The supply and demand for quality rentals in Middle Tennessee favors the property owners, hands down. In light of the current shortage in appealing rental properties, have you considered building a multi-unit residence or small apartment complex as your investment vehicle? Here is a list of 6 top reasons why many real estate investors are choosing multi-units for the best return on their investment dollars.
1) Lower Cost Per Unit
Although the initial cost of building a multi-unit residence or small apartment building is greater than that of a single unit dwelling, this cost is quickly absorbed by the increased income gained through rentals.
2) Improved Vacancy Factor = Better Cash Flow Factor
If you have a single family home and it’s vacant, it’s 100 percent vacant. With no one to pay the bills it becomes a negative cash flow. If you have a four-plex and one of the units is vacant, you’re looking at a 25 percent vacancy factor. Should you choose to construct a 20-plex or even larger, your vacancy factor would be only five percent or less. It’s easy math: the more units, the less impact the vacancy factor will have on your cash flow.
3) Simplified Management
Managing a multi-unit investment property or small apartment building is much easier than juggling numerous single properties. With all the tenants in one place, maintenance and other issues are all consolidated into a single, handy location. Depending upon the unit-size you choose to build, you may be able to hire a full time property manager.
4) Lower Expense
You will have lower maintenance costs per unit when service visits can be extended to cover a number of issues throughout several units, both large and small. That means when the electrician or plumber stops by, he can work on all the problems at the same time, and your bill is greatly reduced.
5) More Units Generate a Greater Reserve
You’ll also have more “staying power” with multiple units because the rent monies you have collected will allow you to have a reserve fund for emergencies. With just one tenant, a $500 emergency repair might wipe you out. With multiple units, it is much easier to absorb those unexpected costs.
6) More Time To Do What You Really Want To Do
Multiple units will give you more time to do what you really want to do. Because time you spend in management is less and positive cash flow is a lot more, you’ll reach the point where you can become a full-time real estate investor if that is your goal! Regardless of your occupation, with more units, you will be able to close in on the kind of financial freedom you’re searching for.
Construct-All USA specializes in commercial, residential, and multi-family construction to the entire middle Tennessee area. We can help you create a beautiful multi-unit building that will take your investment portfolio to the next level! For a free consultation, call our office at (615) 801-8688 today.
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