What Is A Multifamily Home? Is It The Right Choice For You?

Various Types Of Multifamily Homes

1. Duplex- the two-storey house where the different family lives on each floor; one front door with individual entrances
2. Townhouse- two families living in one house divided by a wall; both the units are separate and have a separate entrance
3. Apartment complex- a single structure that can have 5 or more units each with an individual entrance; but common amenities
4. Semi-detached house- it has a shared wall with another home and is bigger in size. These are affordable options in comparison to single-family homes.

Well, this takes us to the…

Difference Between Single-family Homes And Multifamily Homes

In some cases, not knowing the difference between these two can be confusing; because technically all the above-mentioned properties can be used for multifamily properties; but the biggest difference is that multifamily homes typically have more than five units; single-family home has only one unit. Imagine together living with four families but still completely independent.

Now that we have clarified the differences, let's move on to the benefits. As obvious as that might seem anything in demand certainly has some benefits. Then let's go one by one.

Benefits Of Buying Multifamily Homes

1. Increased cash flow is the first benefit that can be obtained from multifamily homes. The rental income obtained from the tenants provides an additional income stream. Not even a single month you stay without rent.
2. A multifamily home comes with more units’ which means a bigger list of tenants. Whatever you have invested will come back in quick return with the larger pool of tenants. The amount you have put into the construction will be paid back through rents.
3. If you are living in one of those units then you can keep control over the property value and repairs. Living near will give you access to catch the problems immediately and solve them. Property management with financial sense- dual benefits.
4. This also increases your investment portfolio as by investing in multifamily homes; either you can live here or rent out all the units or with the rent, you can live somewhere else as well. For property investors who want to build a large portfolio, it is a good option for them.
5. It is surely expensive but easier to finance. The cost of owning a multifamily home can be more than single-family homes but it has easy approval from banks in comparison to other homes because of the consistent cash flow every month.

Special note: For families who are willing to live together but privacy also matters to them then a multifamily home is an opportunity for you all. Maintaining close proximity with privacy and the diversified portfolio… bang on you have so many benefits.

Now coming on the points of consideration to buy a multifamily home.

Making a good investment takes you on your knees because you can’t put your hard-earned money anywhere. It is better you talk to the potential investors, and real estate agents, about the properties and understand the basics. Once your heart and mind are satisfied, then only invest.

Here Are The Points: 

• Location is the most important aspect of any real estate investment. It will decide about the scope of property to sell, rent, or basically provide the ROIs. Do your research and find the location that satisfies your needs for infrastructure and connectivity.
• Ask the chances or reality about the rental income. Well, there is no dearth of doubt that multifamily homes are well known for their potential rental incomes. Do some calculations, find out the cost you need to pay in mortgage, repairs, and maintenance, and understand what you can get in return. Is it satisfying enough?
• Navigate the properties that come with more number of units because that only decides your rental income. More units mean more potential tenants you can rent the property to. Figure out your expectations and the budget then choose the property from which you are hoping to earn.            
• Locate the best seller because the process should be flawless. Ensure that you are buying the property from a person with clear background and have a history of maintaining properties well. So, dig the individual deeper into who is selling you the property.

These points will let you search for the best property; but everything reaching its perfection has some flaws as well (There's something bad in everything good and something good in everything bad.- Michael Lewis) and this stands the same with the multifamily homes as well.  So now let’s catch on to

Drawbacks Of Multifamily Homes

• Higher purchasing point in comparison to single-family homes
• Higher property prices lead to higher costs for insurance
• You should have more capital with you to invest in a multifamily home
• Finding it is not easy you need to do a lot of research on the location
• Being a landlord of so many properties and living in the same place means you have quick knocks on the door
• Vacant units require mortgage payments, which means you will be confined to a timetable

After putting all the information about multifamily homes together, I have concluded that they may have some shortcomings, but they also have many advantages. Investing in multifamily apartments in Dubai offers greater accessibility and better financial growth with a chance of expanding your real estate portfolio.