When you’re thinking about buying investment property in Orlando, there are several excellent reasons to consider multifamily properties. Whether it’s a duplex, triplex, quadruplex, or even a small apartment building, multifamily units provide you with extra cash flow and great long-term investment benefits.
If you’ve never rented out a multifamily property, you need to know it’s a little bit different than renting out a single-family home. Today, we’re discussing those differences and providing a glimpse of what it’s like to be a multifamily investor in the Orlando real estate market.
Avoiding Vacancy Costs in Orlando
When you’re renting out a single property, vacancy is always a risk. They are also expensive. When your home is vacant, you aren’t earning any rental income and you still have to pay for things like landscaping, utilities, and cleaning. There are also extra marketing costs and the time it takes to show the home and find a new tenant.
Multifamily properties are less of a vacancy risk. That’s because you have rent coming in from several sources. So, if you find yourself with a vacant unit, you’re in a much better position to absorb the vacancy costs than if you’re working solely with single-family homes. You aren’t completely without rental income during a vacancy.
Cost-Effective Maintenance Per Unit
Like vacancy, maintenance is another huge expense for landlords and investors. Owning multifamily properties provides the advantage of servicing, inspecting, repairing, and replacing systems, appliances, and functions in several different units all at one time.
With a multifamily property, you can really focus on preventative maintenance. For example, in Orlando we use the air conditioning almost 12 months out of the year. When it’s time to inspect the HVAC unit in one property, you can have all of your units checked at the same time. This gives you a single bill and a lot of peace of mind. Your vendors may offer volume discounts as well, which is a huge money saver. Landscaping, exterior maintenance, roofing, and other maintenance expenses are easily consolidated when you own multifamily rental properties in Orlando.
What to Expect with Multifamily Properties: Tenants and Costs
You need to expect that you’ll be more involved in handling your tenant relationships when you’re working with a multifamily property. You could find yourself managing tenant conflicts, especially when it comes to how neighbors get alone with one another. You may hear complaints about loud music, barking dogs, parking disputes, and trash in common areas. A strong lease will help you in this situation as well as open communication with all of your tenants.
When you rent out a single-family home, the tenant is usually expected to set up their own accounts with the electric company, cable company, water provider, and trash company. Multifamily properties may have a different set-up. It’s possible you’ll find it’s easier for you to maintain control over the utilities and then charge the tenants back for what they use. This is not always the best option, but depending on the size and the way your utilities work, it might be best for all parties and more reliable for you.
Working with a professional Orlando property management company is always a good idea when you’re renting out a multifamily property. Unless you have a lot of extra time and your own expertise, a professional property manager can protect your asset and take care of the tenant relationships. There’s more liability with multifamily properties, especially since there are more tenants.
Our team is experienced with managing Orlando multifamily rental properties. Contact us at R. Russell Properties for more information and guidance.