If you’re considering investing in a multifamily property in Silicon Valley, you may be wondering whether it’s worthwhile. This guide outlines five benefits of multifamily investment properties.

5 Benefits of Multifamily Investment Properties

Although investing in multifamily properties isn’t the right choice for everyone, check out these five reasons many investors choose to take this route:

  1. Ease of financing
  2. Improved cash flow
  3. Passive income generation
  4. Scalability
  5. Simplicity

Here’s a closer look at each.

Multifamily Investment Property Benefit #1: Ease of Financing

Generally speaking, multifamily properties such as duplexes, triplexes and fourplexes, are easier to finance than large apartment buildings are. In fact, they’re just as easy to finance as a single-family property is – and you can even use the same type of mortgage loan to do so. You don’t need to take out a huge investment loan, and generally, lenders feel more comfortable allowing people to borrow enough money to purchase these properties because they know the income potential is greater than it would be with a single-family property.

Related: 3 types of real estate deals that aren’t for the faint of heart

Multifamily Investment Property Benefit #2: Improved Cash Flow

One of the biggest and most significant benefits to owning a multifamily investment property is the cash flow. Because you can rent out two, three or four units, you’ll have two, three or four income streams. And if one tenant moves out, you still have the others in place.

Multifamily Investment Property Benefit #3: Passive Income Generation

As with any real estate investment, a multifamily property can earn you a passive income. This is incredibly beneficial if you’re currently working a full-time job or you don’t want real estate to become your profession. Many people choose to hire property managers on endeavors like these, as well.

Related: How to use a VA loan to buy an investment property

Multifamily Investment Property Benefit #4: Scalability

Expanding your investment portfolio is a lot easier when you work with multifamily real estate. In fact, multifamily properties can help your portfolio grow much faster than single family homes could. Many investors use multifamily properties, such as duplexes, triplexes and fourplexes, as a stepping stone toward larger multifamily properties and other commercial real estate opportunities.

Multifamily Investment Property Benefit #5: Simplicity

Multifamily real estate investments are pretty straightforward, and running them typically requires less effort than it would to run several single family properties or commercial properties. Whether you choose to hire A property manager or tackle all the work yourself, you only have one property to worry about – even if there are different units within the same property.

Related: Real estate investing in the post-COVID era

The Ultimate Money-Saving Hack for New Multifamily Property Investors

Many new real estate investors take advantage of the fact that they have a multi-unit property to work with by living in one of the units while renting out the others. This has the added benefit of putting you in close contact with your tenants, where you can keep an eye on the property, as well as helping you save money. That’s because the other tenants are paying rent, which may be enough to cover your entire mortgage payment.

Are You Buying or Selling a Duplex, Triplex or Fourplex in Silicon Valley?

If you’re selling a duplex, triplex or fourplex in Campbell, Cambrian Park, Los Gatos, San Jose, Santa Clara, Saratoga, Willow Glen or another community in Silicon Valley, we’re here to help. Call today or fill out the form below to find out about our innovative marketing plans that can put your investment property in front of all the right buyers.

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