Whether you are just starting to explore the world of commercial real estate investments or have been here a while, you are probably aware of multifamily units. As commercial real estate brokers, we have seen extensive and unwavering interest in this property type over the years.

Multifamily units are usually always a part of a commercial real estate investor’s portfolio at some point. They are a stable source of income and allow investors to ease into the industry before they start exploring more complicated investments.

If you haven’t explored the potential of this property type yet, here’s a little guide to tell you more about them.

What is a Multifamily Unit?

Multifamily units are residential units with space for multiple occupancies for inhabitants in the same buildings or complex. Common examples include apartments, duplex, triplex, garden apartments, condominiums, etc.

Five Facts about Multifamily Units for CRE Investors

As a commercial real estate investor, below are some key facts you should know about multifamily units.

1. Great Source of Passive Income

Multifamily units are a great source of passive income. You can simply assign an agent to handle the day-to-day upkeep and interactions and comfortably receive your payments regularly.

2. Low-Risk Investment

Multifamily units are popular for being low-risk investments. People are always going to need to stay somewhere. There were at least 42 million renters in the US in 2020, and the number is likely to increase. With an increase in population, this number and occupancy rate will increase as well.

Additionally, multifamily units house multiple residents. So, your income is diversified among them. If a single tenant chooses to leave, you will still continue getting income from others.

3. Availability of Diverse Investment Options

There is no single unit type when it comes to multifamily. There are apartments, duplexes, garden apartments etc. You also have the option of investing in a multifamily fund that will give you a stake in their project.

This will be even more passive and convenient for you  —  consult a real estate broker before signing any agreement to prevent any scams.

4. Consistent Cash Flow

Rent payments become due monthly, so you will receive a consistent positive cash flow from the unit. Depending on the size, target market, and the number of tenants it allows, the monthly income is also lucrative.

5. Increase in Renters Compared to Homeowners

According to statistics, the past few years have seen an increase in the percentage of renters. In contrast, the percentage of homeownership has dropped.

This development shows that people are shifting towards renting, giving an optimistic outlook towards the future of multifamily unit investments.

Conclusion

Overall, multifamily units are a stable, low-risk, and convenient commercial real estate investment you can add to your portfolio. If you are looking for multifamily units to invest in around Rio Grande Valley, please contact us.

The CHRE team has years of experience as commercial real estate brokers, and we will find the perfect investment options for you.