If you’re into real estate, then one of the best ways to reduce your risk and increase your profits is to purchase a multifamily property. Adding one to your portfolio means you no longer need to depend so heavily on a single unit for monthly payments. Some of the options in this regard include townhomes, apartment building units, duplexes, and condominiums. Below, we’ll go a bit more in-depth as to why purchasing a multifamily property can be such a huge benefit.

Understanding the Qualifications of a Multifamily Home

Your first order of business before investing is to understand the difference between commercial and multifamily property. To qualify as the latter, the property must have fewer than five separate units allocated to a single legal address. Then, commercial properties are classified as possessing more than five units. The distinction is especially important for loans. You will find that the process is significantly less involved for acquiring a multifamily property loan than for the commercial variant.

Portfolio Benefits of Multifamily Properties

Contrary to popular opinion, it is perfectly fine and even advisable for a beginning real estate investor to acquire a multifamily property. This way, you can quickly build the home equity value of your portfolio. Instead of going through the long process of adding a handful of single-unit properties over time. You immediately spread out your risk and increase your cash flow. You can significantly reduce your expenses by choosing to reside in one of the units of your multifamily property. While extracting rent from the others.

In short, the multifamily property can build wealth rapidly when compared to the alternative. All during this time, it reduces your risk – just like diversification does naturally. If you’re seeking more information on this matter and other finance topics, contact the experts at Atlas Capital Solutions.