How to Create Passive Income with a Multifamily Home

Owning multifamily real estate is a great way to establish a stable stream of passive income. Although the cost to invest in a multifamily home will likely be higher than the cost of a single-family home, multifamily homes generally produce more revenue and can be one of the strongest assets in an investor’s portfolio based on return on investment (ROI). There are plenty more reasons to invest in multifamily properties, so let’s go over some of the basics and benefits of multifamily real estate.

What is a multifamily home?

A multifamily home is any residential property with two or more individual units. These properties can also be referred to as multifamily real estate or simply apartment buildings. The benefit of these properties is, as the name implies, multiple individual units that can be rented and occupied. Multifamily homes usually have higher values compared to similar single family residences, and that can lead to different regulations when it comes to investing and financing. That’s why it’s important to partner with the right lender who can make it easier to get through the process.

Why invest in multifamily real estate?

Investing in multifamily homes has many advantages that shouldn’t be overlooked. Although the initial cost can be higher when compared to investing in single family homes, once all of the units in the property are occupied it can generate a much higher monthly income. Also, because of the higher revenue generated, it can take less time to recoup the initial investment costs and can become a great return on investment (ROI). Like single-family properties multifamily real estate tends to appreciate over time, and because of their higher cash flow they are more resilient to economic downturns. For these reasons, investors looking to quickly build their portfolios should consider multifamily real estate.

Another benefit of these properties is that it’s easier to manage multiple units at a single location than to manage multiple properties in different locations. This means that if you’re a real estate investor that would like to simplify the process of managing your properties, or if you would like to outsource the day-to-day management of your property, multifamily real estate is perfect for you.

How can I invest in multifamily real estate?

It might not be well known, but it can actually be easier to invest in a multifamily home than a single family one, and it’s because of all the benefits we mentioned earlier. When it comes to securing financing, multifamily homes are considered less risky because they have multiple units that can produce income. Even if the property is partially vacant, it can still be generating a monthly revenue. It’s for these reasons investors and lenders choose multifamily properties, despite their higher cost of entry. It’s also important for investors work with the right lender, who will educate and guide them through entire investing process. Investors should make sure to choose a lender that is knowledgeable, dependable, and has a proven loan history.

About RCN Capital

RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing as well as long-term rental financing for real estate investors, and that includes multifamily properties. RCN Capital also has flexible and competitive loan options available. If you are a real estate investor looking to secure financing for a multifamily property, RCN Capital is the lender that you are looking for. Connect with us today to discuss your next real estate investment.

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