The Los Angeles real estate market is full of diverse opportunities, especially for investors seeking rental properties. A diverse real estate portfolio is essential to investment success, and should always include a good mix of properties. Multi-family investments are a great idea. If you’re not already investing in L.A. multi-family rental homes, we have five reasons that you should be.
Lower Purchase Price per Property
When you think about the number of units you can purchase with the same amount of money that you’d use to buy one single-family home, you can easily see one of the immediate benefits of multi-family investing. Your acquisition costs will be much lower, making even a duplex or a small apartment building a far more cost-effective investment than a new construction single-family home. Lenders are likely to give you better rates on your loan as well, thanks to the potential rental income you’ll be earning and the lower risk of foreclosure and default.
Lower Vacancy Risk with Multi-Family Properties
Vacancies are expensive, and all rental property owners do everything they can to avoid them. Luckily, when you own a multi-family property, your vacancy risk is much lower than it is for people who own single-family homes. You have more units, which means you have more tenants. If you lose one or two tenants, you can absorb that turnover because there are still plenty of other tenants who are paying rent. It’s a lot more difficult for your rental income to dry up completely.
Higher Cash Flow on Multi-Family Investments
More units means more rent checks. Instead of collecting rent from one tenant, you’re collecting rent from multiple tenants. This is going to help you get ahead faster and turn your cash flow to the positive side with your multi-family investment. Some L.A. investors never manage to cash flow their single-family properties in this market because the costs are so high and their income is limited to the one property.
Cost-Effective Management and Maintenance
If you have an apartment building with 15 units, getting maintenance work done on those properties is a lot easier, cheaper, and faster than it would be to dispatch maintenance teams to 15 separate single-family homes around the city. You can take care of preventative issues like pest control, roofing, HVAC servicing, and plumbing checks with a lot more efficiency when you have a multi-family building. You won’t have to pay for multiple visits, and you’re sure to get volume discounts from the best local vendors and contractors.
Increased Portfolio Value and Size
When you’re growing your Los Angeles real estate investment portfolio, investing in a multi-family property will move you closer to your goals than a single-family home. You’re able to bring in a handful of properties rather than just one. This gives your entire portfolio some diversity as well as extra strength. It’s a great way for serious investors to make their market on the Los Angeles rental market. We’d love to talk to you about your investment goals, strategies, and plans for multi-family properties. Contact us today at Bell Properties for all your L.A. property management needs.
