Starting your real estate investment portfolio is fun and exciting. Typically investors start with their first rental property as a small duplex. This helps you get your feet wet in the rental management world. You can learn a lot and continue to build and buy larger unit properties. To get a better understanding of what you are looking for as far as a multi-family property in Palm Desert, you need to know what a multi-family property is. Let's dive in.
What Is A Multifamily Property?
A multi-family property is any residential property that features more than one housing unit. This can be a duplex, triplex, fourplex, apartment complex, or any residential property that will have multiple tenants.
In this case, owners can live in any of their units while renting out the others. This will make it an owner-occupied property and is oftentimes done with multifamily properties.
Any property that has more than 4 units is considered a commercial property and any with 4 or fewer will be residential. This is important when it comes to the lending process. There are separate rules for multifamily and the distinction between residential and commercial comes into play.
So, Why Should You Buy A Multi Family Property In Palm Desert
There are a lot of reasons to buy and own a multifamily property, but here are just a few of the top ones. First and foremost, Palm Desert is a highly sought-after location and a big vacation destination so it is a wise investment to own real estate in this area. Location is everything in real estate.
When you invest in real estate, you are looking for a great return on your investment, This is your cash flow. You want to invest in something where you are going to be cash flow positive and build equity at the same time. Single-family homes build equity but may not give you the cash flow multifamily property cab. Keep in mind you need to set aside savings from your cash flow for maintenance and repairs.
You can build wealth by building your investment portfolio and you have to start somewhere. By owning several rental units you can expand your wealth much more quickly. You can use your positive cash flow to save and purchase your next rental property and so on. This is how you quickly expand.
When you own a multifamily property you reduce the financial risk of vacancy. If you experience a vacancy, you can still be cash flow positive due to the other renters in place. This can relieve a lot of financial pressure on the owner and landlord. This is what makes multifamily units a very powerful asset, especially for a beginning investor.
For all of these reasons and plenty more, multifamily properties are a great real estate investment. For more information on buying a multi-family property in Palm Desert or buying, selling, or investing in any real estate, contact us. We would be happy to help you!