If you do have the opportunity to purchase a multi unit property, go for it. Make sure it is a nice property, or one that you feel has a lot of potential. Also, if you want to try and convert a property into a multi unit one, make sure it is feasible. Make sure you have enough access, and make sure that you can make changes to the current property without having to spend a lot of money. Try and be aware of all expenses you may have before making the decision to convert the property.
One thing you may also want to do if you decide to convert an investment property is to have a utility meter set up for each tenant you may have. You may even want to install one for yourself if you will be doing any work on the property and using its utilities. It would be much easier to do that than figure what all the bills are and give each tenant the appropriate amount of money instead of having to estimate and risk tenants being unhappy about the bill.
Some property investors prefer tenants furnish their own appliances, while others have them provided in each unit. This is up to the investor. Some tenants may not have appliances at their disposal or they will not want to have to buy them, so that could potentially decrease the pool of potential tenants if you force them to provide those appliances.
Some investors say they if tenants have to bring in large appliances they are more likely to stay in your investment property longer. That could be something to think about.
Investment properties with more than 4 units
After a while some investors get bored with flipping houses for profit. I should probably say flipping small houses. You may ask, how is it possible to get bored doing that if you are making money? Well it depends on the person. Some people do get bored with the same thing over and over. They then decide to move on to even bigger and bigger investment properties. I would say your main goal initially is investing in property to increase your income. That is everyone’s goal. It gets easier to do that when you decide to move up to properties that contain 5 units or more. Here you are getting into commercial territory. The financing may be a bit harder to get, you will have to apply for commercial loans. Odds are that if you are preparing to buy an investment property of this type, then you will have plenty of cash on had to do it.
This is a tricky area and some investors prefer to avoid larger unit properties because of the increase hassle they have. You can find good value with properties like these just because of the sheer volume. Usually the property is cheaper per square foot, but as mentioned before, the financing can be a bit tougher to get.
I have read of investors that, in order to get financing for a larger unit property, they will downsize the number of units and make the units that are left larger. So you could find a 6 unit property and knock out some walls and create a 3 or 4 unit property, which would make financing easier to obtain.
Another issue is that there could be several hoops you would have to jump through to get the work done. Just do your research and see if it is worth attempting.
