3 Reasons for Investing in Multi-Family Property in Huntington Beach
Rental property investing is the preferred strategy for those who want an additional source of monthly income with a steady appreciation. There are two primary property types in Huntington Beach residential real estate: single- and multi-family.
While there are fewer obstacles to single-family properties, investing in large residential complexes has advantages. To review, single-family properties have only one available unit to rent, but multi-family properties, or apartment complexes, have more than one rentable space in the same building.
Here are the top three reasons for investing in multi-family real estate in Huntington Beach with financing from Lux Funding.
Easier to Finance Than Single-Family Units
Usually, buying a Huntington Beach apartment building will cost significantly more than a single-family home as an investment so you may think that securing a loan for a single-family property would be easier, but the truth is that a loan for a multi-family property is more likely to get approved than a conventional loan!
This is because multi-family real estate has the potential to generate monthly cash flow. Even if a property has some vacancies or a few tenants with late rent payments, income is still very probable. On the other hand, a single-family home with no renter would generate zero income.
So even a ten-unit property with two vacancies would only be 20% unoccupied --hardly in a position for foreclosure. Thus, multi-family units are a less risky investment for lenders.
Growing a Portfolio Is Faster
Multi-family Huntington Beach real estate is perfect for property investors who want to build a considerable portfolio of rental units quickly. Think about it --acquiring a 10-unit apartment complex is faster and easier than purchasing 10 separate single-family rental homes.
Let's also remember that the latter route may also require you to open 10 different loans for each property. Clearly, one property with 10-units is more time-efficient.
You Can Afford To Hire Property Management
If you're the type of investor who prefers a hands-off approach, you'll likely be able to afford a property manager with the income you produce from a multi-unit. Your manager would take care of finding and screening prospective tenants, collecting rent, handling evictions, and maintaining the property.
On the other hand, most investors who own one or two single-family rental homes typically don't have an external manager because the income generated from single units is much less. The amount of income made from multi-family properties each month gives owners wiggle room to take advantage of property management services without cutting into their margins significantly.
Next steps for getting started in multi-unit investing in Huntington Beach
Like stocks, property investing allows one to succeed using different strategies, one of them is owning a collection of rental properties such as apartment complexes or multi-family units.
Contact us today at Lux Funding to learn more about property investments or pre-qualify using our secure online application.
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.