The Multi-Family is a classification of housing, where multiple separate units for residential inhabitants are contained within one building or several buildings within one complex.
A Multi-Family is usually composed of a minimum of 5 units in a residential building where units are individually owned and leased by a single landlord.
Many communities include multi-family residences, usually with a common basement, a common entrance, an entrance hall, stairs to the second floor, and often a back entrance. In older buildings, the back entrance and stairs may have been added on a later stage. A property of this type must have an individual entrance for each unit. Otherwise it may be considered as a “single unit”. To be a “multi-family”, the property must comply with the rules of the separation of units established by the HUD (US Department of Housing and Urban Development) and regulated by the mortgage industry.
Two-storey and perhaps three-storey buildings are quite common in some older neighborhoods. In some cases, the layout of the apartments may be different and the lot size may be larger than that of a house.
As always, the location of the property is essential. The rental profitability will be thoroughly studied so as not to overvalue the asset.
We can often find on the market properties with an announced yield around 10%, but in reality the net yield obtained after all expenses, taxes or fees, can and will often be below 5%.
We always integrate in the operating expenses, the insurance, the management fees, vacancy and unexpected charges. Not included is the property tax, which represent around 1.8% of the assessed value.
By taking limited risks, our approach enables us to guarantee our investment and its short-term profitability.