What is multi-family housing?
- Multi-family residential (also known as multi-dwelling unit or MDU) is a classification of housing where multiple separate housing units for residential inhabitants are contained within one building or several buildings within one complex. Units can be next to each other (side-by-side units) or stacked on top of each other (top and bottom units).
- A multifamily property will generally consist of owning the property and the land on one recorded deed.
Who is multi-family for?
- Multi-family developments cater to a diverse range of people. As it’s a similar concept to co-living or co-housing, multi-family developments initially housed young people with disposable income. However, older people have started to take notice of the benefits that multi-family living has to offer in recent years such as the close proximity to family.
Types of multi-family property
- Apartment complex/building
- If used as commercial space, then it’s also a mixed-use building
Multi-family vs Single-family housing
- The distinction between multi-family units and single-family ones is that the units can’t be purchased individually; there’s one owner for the whole building.
Reasons to invest in multi-family developments
- High initial cost, but easier to finance – a bank is more likely to provide a loan for a multi-family property than a single-house unit
- A steady and strong stream of cashflow
- Multifamily investments epitomize scalability - building a large portfolio of rental units takes less time
- Property management services become a financially viable option
- Investing in multifamily properties lets you boost your income while reducing vacancy rates