A residential property containing multiple units can be a lucrative and reliable real estate investment. However, owning residential property comes with its own challenges. Among these, it is important to recognize that you’ll be managing people’s living spaces, which can require greater personal sensitivity than managing commercial property for businesses. That said, if you’re considerate about your investment, and prepared for the necessary work, investing in multi-family real estate can be profitable and rewarding.
Be Considerate of Your Tenants
Whether you’re renting commercial or residential space, being a responsible landlord will always promote better outcomes in the long run. This is especially true in a residential property, because people’s homes are intimate, personal spaces. Aside from humane consideration, you’re most likely to develop effective relationships with tenants — and keep them happy in the long-term — if you are considerate and responsive to their needs.
If you’re buying a multi-family real estate with existing tenants, this is even more essential. You’ll be coming in as a new landlord, and tenants may be unsure what to expect. Be sure to understand any lease agreements prior to purchase, to know your rights (and your tenants’ rights) prior to taking ownership. Assuming your tenants will remain in their current homes after your purchase, take time to get to know them and their needs. In the long run, this will help both you and your investment.
Assess Your Property’s Condition
When considering any piece of multi-family real estate, you’ll want to assess its state both inside and out. Outside, consider structural integrity, grounds, windows, siding, and parking areas, among other plausible issues.
A lived-in interior can potentially be more complicated. For instance, it’s easy to miss a leak, or a long-standing electrical issue. One of your best resources in this respect will be current tenants, who likely know the property well, including both its benefits and shortcomings.
Keep Things Up To Code
In any property, but particularly a multi-family residential one, the best way to deal with building problems is to solve them before they occur. After purchasing a multi-family piece of real estate, make sure you do an inspection in each unit and fix anything that needs repairs. Always ensure the building is up to all fire and other codes. Aside from keeping tenants happy, you’ll be ready for any problems that do arise, and be prepared if you decide to sell the property in the future.
A multi-family residential real estate property comes with its own set of challenges, but if you meet the situation with consideration and tact, you may find yourself in a profitable investment.