6 Things to Consider Before Investing In A Multi-family Unit

Dated: September 20 2018

Views: 136

Are you planning to invest in real estate by purchasing a multi-family home with two, three or even five or more units and then renting it out to tenants in Alaska?

This is a great way to generate income and build your net worth. Rental income has minimal complexity when it comes to ownership. Maintenance work can be hired out easily, allowing owners to be hands-off for the most part.

Passive income from real estate is more resilient to economic up and down cycles. It is a stable investment compared to other types of assets and lenders may provide more financing options. According to a recent report from Forbes, real estate investing is the number one way to build wealth without getting into stocks.

However, just like as any other investment strategy, you need to carefully study and make educated decisions that lead to success. Here are the key things to consider before investing in a multi-family home.

Location

This is a major factor to consider. Is the unit located in a desirable Alaska area? Is there a high ratio of renters versus home ownership in the neighborhood? Look at crime statistics and trends. What are the proximity to schools and public amenities such as parks? Take a drive through the area and take note if there seems to be a high vacancy rate on rentals.

Comparables

Do your homework before buying the unit. Work backwards – how much would you have to charge in rent in order to make a profit? Is the monthly rent comparable to other units for rent in the area? Determine if you can come out in the positive after considering current rent prices, maintenance needed and if necessary, fees for services such as a leasing agent.

Demographics

Who will be your target renters? Will it be students? Single professionals? Families? Retirees? Will the demand fit the style, size and type of your property? For example, if most people in the area are single professionals, they will most likely opt for a one-bedroom or a studio apartment. Be sure that your investment property is a good match for the area's population growth, economy and people's standard of living.

Condition

How's the condition of the property? Does it need minimal or a full renovation? Will it need more maintenance than usual? Will it need some or major updates? Be sure that this will be an investment and not a cause of headache for you.

Government regulations

Find out if there is any government restrictions in your area that affects your unit. Be sure that the home is up to code on local building guidelines. A good place to start is to talk to the Building Department at the local city hall. This can save you a lot of money and headaches down the road.

Get some help

Are you ready for the challenge? Getting some help from the professionals is one of the best steps you can take in your real estate investment journey. From looking into all the factors stated above up to getting someone to manage your property, there is always someone who can help to make your life easier and ensure that your venture is successful.

For free resources and to learn more about multi-family home investments available in Alaska area, call 907-570-6757 or 907-720-4663. Ask for our list of properties that is primed for investment opportunities.

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Homes by Vanna

Vanna has called Alaska home for the past 15 years. As a mother, real estate investor and previous business owner, Vanna brings many different perspectives when working for her clients. She has been a....

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