The real estate industry has its share of ups and downs as years passed by. Some entrepreneurs have qualms about entering this field. They do not see the long-term security of investing in real estate properties. The truth is real estate will always be relevant. It will always have a steady set of clientele. People need shelter. People buy or rent properties for them to have a security of a roof over their heads.
Entrepreneurs should not ask then if real estate is worth the investment. The better question is: what type of property is the most lucrative? With bankability in mind, real estate inventors should look into apartments. Here are the reasons:
Easier to Get Financing
Some entrepreneurs want to enter the world of real estate but do not have enough finances yet. Looking at apartments is an excellent investment strategy. These rental properties can help your loans to get fast approval. This is because apartments have a higher market size. Lenders see the income potentials of these rental properties.
There are many options of loan sources. Among the most famous ones are banks. But as a real estate investor, you may look for other entities with quicker loan processes. Hard-money lenders give you the chance to make your real estate investment dreams come true. They process loans at a quicker pace, thus helping you to get properties fast. They also work with you to create an exit strategy before you reach the maturity of your loan. Another option of loan sources could be family or friends. There may be someone in your network who is willing to let you borrow the amount you need.
Has Greater Mass Appeal
Apartments have a greater market reach as compared to single-family homes. The affordability of these rental properties helps to get the attention of renters. Single professionals, young families, and empty nesters are among this list. These are people that have other priorities set before they can look into buying their homes. Another factor why they choose apartments is a sense of community and belongingness. Multiple doors in one building create a strong neighborhood.
If you want to sell your apartment, there are also many potential buyers for this property. First-time buyers and seasoned investors have active interests in apartment rentals.
Multiple Sources of Income
One reason why real estate investors prefer apartments is the guaranteed revenue. Multiple doors translate to multiple sources of income every month. In the case that some tenants are unable to pay their dues, you would not go empty-handed. Other tenants can keep the cash flow going.
With the proper screening of tenants, there is an assurance of payments for every door. The costs of maintenance for such property investments are also minimal.
Apartments lessen the risk of loss or debt. There may be some instances that some units are not occupied. Still, you can expect to have the needed level of revenue to cover the costs. On top of it, there is still a wide margin for gain or profit. When you compare it to a single-family home, no renters or buyers yield zero income.
Quicker Way to Gain Equity
Multiple streams of income translate to a larger amount of money in a shorter time. With this, you can finish your mortgage loans and gain higher equity in your property. This may not be possible with a single-family home.
There is relief from having to pay a mortgage loan for a long time. Aside from this liberty, having large equity is also a great way to expand your wealth. You can use your equity in many ways. Two of the most notable uses are for renovations and as a down payment for another property.
Builds Your Records by Exponential Bounds
Having multi-family homes is an excellent way to grow your portfolio. Your real estate investment portfolio shows your assets. It also shows how far along you are in your financial goals. Single-family homes will give your portfolio slow progress.
Apartment rentals, on the other hand, let you add to your portfolio faster. This is because it is not counted as a single property. A multi-family property has an asset count depending on the number of doors or units that it has. Apartment rentals are also a stable way to help you reach your financial goals fast.
Multi-family homes or apartment rentals are among the most lucrative properties. Anybody who would invest in real estate should consider looking into these rentals. These are sure investments that will contribute to their success.