With recent changes in the South Florida housing market, there’s never been a better time to invest in rental properties. Whether you’re a seasoned pro looking for new homes to flip and rent or this is your first step into rental property ownership and management, current market conditions are perfect for expanding your real estate portfolio. Multi-family rental properties in particular are a fantastic investment opportunity– here’s why.
Increased Return on Investment
The most appealing reason for investing in multi-family properties is the potential for a high return on investment. Multi-unit properties are more cost-effective than managing multiple single-family homes. Beyond property tax and maintenance savings, owning a duplex, condo building, or apartment complex also reduces other monthly expenses like:
Gas, electric, and water bills (if applicable)
Property management and employee-related costs
Safety and security measures
By reducing your costs in these and other areas, multi-family property ownership offers the best of both worlds. Having more than one tenant on the same property increases your income without increasing your business expenses. This means you can more quickly recoup the costs of acquisition and reinvest those funds as you see fit.
Greater Financial Stability
Property ownership as a means of passive income is a great way to build financial stability and generational wealth. Multi-family properties provide multiple streams of income, helping to further increase financial stability. Whereas a tenant falling behind on rent in a single-family home may cause financial strain on your end, the impact is lessened when there are multiple streams of income through other rent payments. Similarly, if a single unit in an apartment complex is empty the loss is typically less impactful than allowing a single-family home to remain unoccupied.
That said, it’s important that you adhere to any and all applicable laws in regard to all tenant-landlord agreements. This includes keeping security deposit funds secured in a bank account and upholding your legal obligations. In the state of Florida, landlords of apartment complexes and multi-family properties must:
Comply with the requirements of applicable building, housing, and health codes;
Maintain the plumbing, roof, windows, floors, steps, porches, exterior walls, foundations, and all other structural components in good repair
Make reasonable efforts toward the extermination of rats, mice, ants, wood-destroying organisms, and bed bugs
Maintain clean and safe conditions in common areas
Provide outside receptacles for garbage
Reduced Out-of-Pocket Costs
While you are legally obligated to secure direct deposits separately from disposable funds, there are no such laws governing how you use rent payment funds. While at least some portion of this money will likely go to costs related to property maintenance, optimizing this is key to protecting your financial interests. Dedicating a specific percentage of each month’s income toward business and property taxes may seem like a given, but without adequate financial planning, you can easily find yourself in a tough spot when it comes to incidental costs.
Just as you would for your own finances, setting up savings accounts or sinking funds for anticipated costs or potential expenses associated with property ownership can protect your interests. Some costs you can mitigate with some adequate financial planning include:
Storm damage repairs
Unexpected foundational or structural issues
How The Onyx Group Legal Can Help You
If you are ready to invest in a multi-family property and begin making passive income as a landlord, The Onyx Group Legal is here to make sure you start off on the right foot. Our extensive experience with property law and resolving landlord-tenant disputes makes us your perfect resource for ensuring your lease is iron clad and assisting with other legal matters. And, should you ever need to evict a delinquent or disruptive tenant, we’re here to make the process smooth, quick, and painless so you can focus on what matters.
Contact us today to learn more about our services.