Real Estate Investment

Multi-family Real Estate Investment: A Smart Investment

Last Updated on March 30, 2021 by Admin

Investments go hand in hand with business. If you’re in a business, then you’re investing in something, hence, you’re an investor. With that said, there are good and bad investors. Are you a bad investor or an intelligent investor? Indeed, it’s not a good idea to be amongst the bad investors. But how would you ensure not to be one of them? Every investor always has the goal to earn, but what if you get otherwise?


Experts say that the intelligence of an investor has nothing to do with IQ scores. It is about the trait and the character more than the brain. In investment, intelligence has nothing to do with higher education, but it simply means an investor must be disciplined, patient, and eager to learn.

While learning is the acquisition of knowledge, it should also include the unlearning process. People have so many biases, and there is this contextual information over a subject that once learned.

This preexisting knowledge might become a hindrance to learning new things. And this learning includes knowledge of investment.


Investment is an acquired asset; the goal is to earn or generate income. There are several investment portfolios that anyone can choose from. The different investment portfolio includes:

  • Stocks.
  • Corporate bonds.
  • Government bonds.
  • Exchange-traded funds (EFTs).
  • Mutual funds.
  • Bank certificates of deposit.
  • Real estate investment trusts (REITs).

Of all the investment portfolios, the real estate investment trusts (REITs) are among the best. The three types of REITs are equity, mortgage, and hybrid REIT. Equity REIT is the most popular among the three.

Equity REITs earn income by operating and managing property such as residential apartment buildings, shopping centers, and office buildings. REIT is a vast industry and might be a bit confusing, especially for newbies in the business.

What Is Multi-Family Real Estate?

We have two types of investments in residential buildings; multi-family homes and single-family homes. As the name suggests, the single-family home is a building that can accommodate only one tenant at a time.

At the same time, a multi-family property, also known as a multi-dwelling unit (MDU), can accommodate multiple tenants at a time.

Since a multi-family property has more than one unit, multiple tenants can rent out the property. Each unit in the property has a separate bathroom, bedroom, kitchen, and living room.


Tenants do not own the property. The property owners will manage the facility as part of the service they provide to their tenants. It may include renovation, move in, and others.

Investing in multi-family real estate will give you a long list of good reasons, and it is best to get guidance from trusted real investment firms like Gray Capital LLC. These experts will guide you through, especially for beginners who need guidance to have a safe and secure investment.

The Basic Types of Multi-family Properties

In multi-family real estate investment, the investor has several options where to invest, and it comes with different features:

Duplex –  It is a building with two units. The building is usually arranged side by side, and each has its entrances and without common areas. Duplex is the simplest multi-family real estate investment.

Triples or Fourplex – It is a building with three or four separate living units sharing one or two common walls with separate entrances

Townhouses – Uniform multi-level houses built adjacent to each other having different entrances. It’s generally a two-level, single-family residence.


Condominium – Large property complex with a living space individually owned and independently sellable. Typically, condos are within a high-rise building.

Apartment – A building with more than one living space that can be rented out to tenants for residential or non-residential use.

Advantages Of Owning A Multi-family Real Estate

There are several  advantages of investing in multi-family real estate, and here are a few of them:

Multiple Income Streams

Since the investor/owner owns multi-units, the opportunity of generating more income is high, and thus, it can be more profitable.

Natural Price Appreciation

Price appreciation is an increase in value over time. The population is continually increasing, so the demand for residences is increasing also. People need shelter to call it home, while businesses thrive in a dense population. This means that the demand for real estate property is high, and this is where multi-family real estate is much favored; thus, the return of investment is subsequently high.

Lifetime Passive Income

One of the best income sources for passive income is rentals, which is the main feature of multi-family real estate investments. Mostly, all tenants don’t own the property but rent. Unless those renters acquire their property, they will spend on rents the whole time. Passive income does not need much effort to grow and maintain.


There are several investment portfolios available in the market. One of them is the multi-family real estate investment under the Real Estate Investment Trusts. This investment portfolio can become the best because of its benefits, one of it as a residence that people call home, a basic need of humans.

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