While some beginning investors may feel daunted by the prospect of multifamily real estate, they needn’t be: This type of real estate offers several advantages that make it a lucrative option for quickly building a portfolio. To learn about those advantages, just keep reading.

Lower Per-Unit Expenses

Compared to single-family homes, multifamily real estate offers lower per-unit expenses. For example, a dozen single-family homes will have a dozen roofs to maintain, yards to mow, and so on. However, an apartment building with a dozen units will only require landscaping and maintenance in a single location. And it will become even easier if you choose to hire a property manager, which is often made possible by the high levels of cash multifamily properties generate.

Rapid Portfolio Growth

As Investopedia’s Warren Cassell Jr. points out, multifamily real estate presents an opportunity to rapidly grow your portfolio. Sticking with the example of a dozen-unit apartment building versus a dozen separate homes, the former will require only a single financial transaction to purchase, a single inspection, and so on. The latter will require a dozen of each—not to mention lots of travel between all of the properties.

Diffused Risk

Another advantage of multifamily real estate is that spreading your investment across many different units diffuses your risk. Vacancies serve as an example: If a unit in a multifamily dwelling goes vacant between tenants, during renovations, or under other circumstances, the rest of the units in the building can continue to generate income through rent. However, a single-family home offers no such backstop: A vacancy removes its cash-generation abilities entirely.

Lower Levels of Competition

Because many investors are, mistakenly or not, leery of investing in multifamily properties, you may find that there is less competition to purchase them in a given market. And when there is lower competition, the buyer wins.

If you’re curious about funding options for your next business venture or investment, get in touch with TopFund Capital. We’d love to discuss financing with you!