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How to Decide if that Multiplex for Sale is a Good Investment

Whether you’re a seasoned real estate investor, or you’ve always kept your eye on house prices with dreams of ‘one day, spotting a multiplex for sale can be intriguing. If you’ve bought and sold investment properties before, you might wonder if it’s any different with a multiplex. If you’ve always wanted to get into real estate investing, maybe a multiplex is the way to go.

What is a Multiplex?

Before we look at whether a multiplex is a good investment, let’s learn a bit more about them. A multiplex is a multi-family residential building that’s been built with, or split into, up to four residential units. If there are more than four units, it’s considered a commercial property and subject to different rules and costs. Other names for a multiplex include multifamily dwelling, duplex (two units), triplex (three units) and quadplex (four units).

What Makes a Multiplex a Good Investment?

Buying a multiplex can seem daunting at first because their prices are usually higher than for single-family homes for sale in Markham. But if you can manage the added cost, a multiplex can be an excellent investment, even for first-timers.

Tenants

Just like investing in a single-family home, if the multiplex you are considering is tenanted, it makes a huge difference. You will have the instant cash flow to help with your mortgage and other costs. However, multiplexes have a big investment advantage over single-family homes. If you lose a tenant from a multi-family dwelling, you still have one or more sources of rental income. But if you lose your tenant from a single-family unit, you need to be prepared to carry the property until you can find a new tenant.

Cash Flow

That point of having more than one source of income makes a multiplex a much better investment from the point of cash flow too. Yes, your purchase and carrying costs for a multiplex will be somewhat higher. But the differences in costs are not nearly as high as the differences in rental income. You will generally be able to enjoy a higher ROI from a multiplex than from a single-family unit.

Easier to Manage

Think about it this way. If you have four separate single-family homes in your investment portfolio, you need to manage four different properties. But if you have a quadplex, you only need to manage a single property.

If you would like to learn more about multiplexes for sale, get in touch with the multiplex specialists at The Tar Team.

Also, check out our recent article “5 of the Best Home Improvements for Resale Value“.