There has been some significant movement in the real estate market recently, and you may be wondering if now is a good time to purchase a piece of property. Generally, multifamily homes are considered to be a great investment, even in times that the market trends downward. That’s because multifamily property is seen as a very stable investment, and it tends to appreciate in value regardless of greater market trends. We agree that multifamily homes still make a great investment right now for a variety of reasons. Continue reading to learn why you should consider one for your next real estate purchase.
The best thing about a multifamily investment is that it consistently provides great returns for you in the form on rental income. People will always need a place to live, and owning a multifamily homes means a steady income stream even in times of market regression. The other great thing about these properties is if one of the units becomes vacant, the others still continue to generate cash flow. Smart investors will take this time to renovate the vacant unit and increase their monthly income even further. This has the added benefit of increasing the market value of your property as well.
Investors are constantly looking for ways to beat inflation and make their money work for them. But did you know that multifamily homes make one of the best inflation hedges? Most real estate tends to appreciate over time, and multifamily property is no different. In fact, because this type of property makes for a very stable investment, it appreciates more consistently than other types of real estate. Plus, as we mentioned, there is the added benefit of cash provided to you each month.
According to CNBC, the real estate market in America is 5 million homes underbuilt. With the market so in need of homes, prices are set to continue to rise, as are rents. For multifamily homes, this means higher property values as well as higher monthly income for owners. That also means the best time to invest in multifamily real estate is right now. Waiting any longer will mean a higher cost of entry, but you can make the pricing growth work for you by purchasing a property as soon as possible.
Another reason to consider owning multifamily property is all the tax write-offs that come with them. For starters, you can deduct most of the costs associated with owning and managing the property. Most of your business expenses can be written off, as well as any maintenance and repair expenses that will come up along the way.
You can also benefit greatly from depreciation by performing a Cost Segregation Study. When you conduct a cost segregation analysis, you depreciate all of the assets on a property over the useable lifespan of the asset. You can include everything from the building itself to appliances and external improvements in the study. Depreciation can end up saving you heaps come tax season, even if the property is actually appreciating in value. Consider working with a tax professional to maximize your savings.
Looking to add a multifamily home to your real estate portfolio? RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors. If you’re looking to finance a multifamily property, RCN Capital has competitive loan options available. Connect with us today to discuss your next real estate investment.