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Many families are struggling to retain the value of their rented single family residence. One of the foremost challenges families are facing is they cannot rent the space cost-effectively while also balancing the risks of single family property ownership as a landlord. It’s why many are now considering swapping their single-family property for alternative real estate investments that yield higher returns while limiting liability. In this latest post, we’ll look at the benefits of a 1031 exchange and multi-family property investment.

20-30% MORE ANNUALLY

MANY INVESTORS HAVE FOUND THEY CAN MAKE 20-30% MORE IN PROFIT ON A MULTI-FAMILY PROPERTY COMPARED TO SINGLE FAMILY PROPERTY OWNERSHIP. THIS HIGHLIGHTS THE INCREASING VALUE WITHIN THE MULTI-FAMILY PROPERTY MARKETPLACE AND WHY SO MANY INVESTORS ARE NOW LOOKING INTO THE OPPORTUNITY. RETURNS ARE RISING IN CITIES THROUGHOUT THE COUNTRY, AND MANY LEADING INVESTORS ARE CHAMPIONING THE SWITCH TO A MULTI-FAMILY PROPERTY INVESTMENT.

 

LOWER RISK WITH MULTI-FAMILY COMPARED TO SINGLE FAMILY RENTAL

While renting out a 2nd home can create cash flow, it can be much riskier than owning a multi-family property-even one as small as a Fourplex. A single family rental is either 100% occupied or vacant, meaning one month can have ZERO income. If a home is vacant for one month in a year, or 8.3% it can eat into earnings for the year significantly. Whereas, Los Angeles and Orange County apartments have vacancy rates less than 4% and some as low as 2% in some areas.

When you own a single-family property, you’re beholden to small changes within the local real estate market. You’re also liable for any maintenance issues that occur on the property. This might mean you have to pay to fix a boiler or an AC unit, significantly reducing your returns. While multi-family properties use the same equipment, this risk is spread over several units. You’ll receive more income balanced against the same level of risk.

A THRIVING MARKETPLACE
THE MULTI-FAMILY PROPERTY MARKETPLACE IS THRIVING ACROSS THE COUNTRY. THE LATEST DATA SHOWS THAT MULTI-FAMILY PROPERTY INVESTORS ARE ACHIEVING HIGH LEVEL RETURNS FOR INVESTORS. IT’S CONSIDERED THE IDEAL TIME TO TAKE ON THE INVESTMENT PROCESS AND TO REVIEW THE FULL RANGE OF MULTI-FAMILY PROPERTY OWNERSHIP OPPORTUNITIES AVAILABLE.

SMALLER POOL OF RENTERS

The number of renters available to you as a single-family property owner is lower compared to owning multi-family properties. Rents can be made more affordable within multi-family buildings, ensuring multi-family buildings often have various units suitable to unique renter profiles. This will help you in ensuring high tenant numbers throughout your ownership. It’s one of the ways in which multi-family property owners can reduce the amount of time it takes to gain a return for their investment.

OUR TEAM IS HERE TO EXPLAIN ALL THE DETAILS

When considering how best to complete a 1031 exchange and swap your single-family investment property for a multi-family building, it’s imperative you have all the data at your disposal ready to make the right decision. Our trusted team is here to give you all the details you need!

We can help you carry out a free 1031 exchange analysis, which takes into consideration all the elements involved in your ownership. Our experts have helped investors improve their returns while lowering their risks through the 1031 exchange process. To learn more on how to complete a 1031 exchange and have a free, no obligation analysis completed by our team, call now at 949.343.0202.

References:
1. http://www.wsj.com/articles/u-s-apartment-rents-rose-the-most-last-year-since-recession-survey-says-1452054600
2. http://cbrecapitalwatch.com/?p=2236
3. Iii COSTAR Analytics

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More than ever, a trusted real estate advisor is integral to wealth management. Stanfield Real Estate looks forward to earning your family’s trust and leveraging our success for your benefit for generations to come.