RENTAL PROPERTY INVESTMENT in small and medium sized units
Why rent out several small units rather than one large apartment? There are several reasons for investing in real estate. It can be a traditional investment, with the aim of obtaining immediate financial viability. Prices for new rental properties are climbing everywhere. This means that real estate has a good profitability in comparison to stock investments. This type of investment can also be a good way to diminish your taxes.
Several cities have whole neighborhoods that are gentrifying. This process opens up new markets for viable investments, especially before prices rise and damage the profitability.
THIS is also true of neighborhoods in Paris that used to be neglected.
Tenants’ standards are as high as the ones of homeowners. In order to rent well, you need to find a nice apartment, located in a pleasant neighborhood, and maintain it properly. Once you’ve taken all these elements into account, you will need to determine whether you should make several small purchases or focus on one larger apartment. As it turns out, both options have positive and negative aspects. Considering that buying apartments in poorer conditions create good possibilities for solid rent profitability. Such units that need refurbishment can be great opportunities.
Buying 2 or 3 studios will allow you to diversify your investment, bet on different rental markets and make your investment more secure. If you decide to do this, you can buy units in different districts of a city, in different types of buildings, and of different sizes, which will increase the safety of your investment. The first advantage of this strategy is that the risk of sudden departure of all you tenants is limited. The second is that the risk of unpaid rent is shared among the properties. Also, if the renter wants to resell one or more studios, the risk of lost value is smaller because multiple markets in a city can’t lose value at the same time. As a matter of fact, property acquired at a low price in a changing neighborhood will most likely be resold in favorable conditions. Additionally, in the event of resell, a smaller property will sell faster than a large apartment because of its price. And, if needed, the investor can decide to sell only one or two unit(s). Finally, rents for smaller surfaces are higher.
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