As an experienced property advisory company, WPG Advisory has advised on many different types of multi-income properties. These include residential buildings with several units, such as duplexes or apartment complexes, or commercial buildings with multiple tenants, such as shopping centres or office buildings.
Some multi-income properties are mixed-use buildings that combine residential, commercial, and even office spaces.
Through our experience with these types of properties, we have seen various pros and cons emerge. Let’s review some of them here.
Pros
Arguably the greatest benefit of multi income properties is the diversified revenue streams that they offer. This reduces your reliance on a single income from a single tenant, thereby ensuring a more stable source of revenue.
Aside from the diverse nature of the different income streams, these kinds of properties are able to generate more money overall than single income properties because the property owner is able to spread certain fixed costs, like property taxes, insurance, and even some maintenance expenses, across multiple units. In doing so, the overall cost per unit is reduced and your potential profit margin increases. This is called an economy of scale.
Engaging a property buying agent can be particularly beneficial when navigating the complexities of acquiring multi-income properties, ensuring you get the best possible deal and making informed decisions about the investment.
Multi-income properties are also seen as fairly attractive investments, since they can appreciate nicely if well-maintained and well-managed.
Cons
On the downside, a more diversified property means more complex property management. You will need to manage various tenants simultaneously, requiring your attention to multiple aspects of each tenancy, including lease agreements, complaints, planned maintenance and vacancies. This can be both challenging and time consuming.
Diverse multi-income properties also require a higher initial investment, as these types of properties are typically larger and require specialised infrastructure and upkeep.
Given the large initial investment, complex financing mechanisms are often required to fund large multi-income properties.
Maintenance and repair costs are also likely to be much higher, as you will need to maintain multiple units. With more tenants occupying the property, there are more opportunities for things to get damaged, making the need for upkeep a constant concern.
That being said, investments are long-term. The most successful investors seek guidance from a team of advisors who guide them in making the right decisions for their particular circumstances.
For those looking to sell a multi-income property, vendor advocacy services can be invaluable. These services help navigate the sales process, ensuring that the property is marketed effectively and sold at the best possible price, all while reducing the stress and complexity involved.
With the right expertise in your corner, you can look forward to a lucrative income stream in years to come, and your property portfolio will stand as a testament to your hard work and long-standing ambition.
If you’re looking for a professional property advisory company with plenty of experience in multi-income properties, whether residential, commercial, or mixed, contact WPG Advisory today!