Multifamily Rentals: How to Buy Profitable Properties
If you are considering buying a multifamily property, it can help to learn some things to make it easier for you. Coming up with an offer on multifamily rentals can be tough, especially if you are rather new to this type of investing. However, by taking a few steps, you may be able to make the process easier.
Conduct an Analysis
Before you ever make an offer or even seriously consider an offer, you need to run through the financials and specs on the property that you are considering. You should run through a quick analysis on any property first to see if it is really worth your time.
Start by looking at the location. If it is not in a location that you know well, then you should do some research. Make sure that it is an area where renters would want to live. Check into the schools and the crime rate. If it helps, you can award a grade to the location, which can be helpful when you are comparing multifamily rental properties later.
You should then look at the number. Find out the number of bedrooms and bathrooms in each unit. Compare that to what is in demand in the area. Again, you could grade this for easy comparison. Look at the current rent being charged. You may want to consider if this is too high or too low compared to other rentals in the area. Make a note on what you think you could charge for each unit to get a total rental income amount. Finally, look at the expenses for maintaining the place. Consider any utilities that may be included in the rents, along with any routine maintenance costs.
After you have analyzed the property, you should take a deeper look at repairs that will be needed. This could include any updates, like new carpets, painting and roof repair. You should make a list of things that need to be done right away, along with those things that will need to be done in the future. It can help to also list things that will need to be done weekly, monthly and annually. Don’t forget to note cost estimates.
Once you have gathered all your information, you can begin comparing your options. Decide which multifamily rentals you are serious about. Go look at them and gather more information. In the end, based on all the research you have done and information that you have gathered, you should be ready to make a final decision. You can then make an offer and hopefully, become a property investor.