Should you target four doors...
what if you could add four suites?
What Is a Fourplex?
Fourplex properties are multi-family homes that contain 4 units. These medium-sized buildings have become increasingly popular with real estate investors. This is in part due to the fact that fourplex buildings are the largest properties you can invest in using residential lending.
4 Tips for making a multi-family investment in Edmonton.
If you’re a novice investor, then you are probably asking yourself questions such as “how do I buy a fourplex?” or “what should I know before buying a fourplex?". These tips will help answer your questions and guide you through the process of investing in a fourplex.
1. Invest in a location with solid fundamentals
LOCATION, LOCATION, LOCATION is everything in real estate investing. The rental property that you invest in should be located in an area with good economic and demographic trends. The safest approach is to always bet on areas with a growing economy, a booming population, and a healthy employment sector. These fundamentals will ensure that your investment property is consistently generating POSITIVE CASH FLOW.
2. Rental income should be 0.70% of the property’s price
This is one of the simplest and most effective ways to guarantee a decent return on investment. A fourplex that generates rental income above the 0.7% threshold boasts a high price-to-income ratio. This is a great rule and it will enable you to recoup your initial investment fairly quickly. Alternatively, investment properties with lower rental income rates will take much longer to see those returns.
2. Check listings on reputed real estate websites
Working with a real estate agent is typical for savvy investors with the benefit of market experience and knowledge but the services of an agent can be too expensive for some. In fact, agent commissions can be one of the biggest single expenses that investors face. Is a real estate agent with it, in our opinion, a good agent is worth it, and as you assumed, a bad agent is not, and could cost you money on a project. Good real estate agents can find you good deals and bad real estate agents will find you bad deals, choose wisely. There are also simpler and cheaper alternatives. There are many ways for savvy investors to find properties through websites, networking, wholesalers, and even canvassing neighbourhoods. And likewise, there are many ways to sell properties as an experienced investor.
4. Explore all financing options
Smart financing is the key to the success of any real estate project. In the case of fourplex properties, there are several lending programs that can help investors finance the purchase. You might be eligible for different programs depending on your project and whether or not you’re a first-time buyer. Talk to a local professional to get an idea of all of the options that are available to you.
Keep these tips in mind when you are analyzing a fourplex deal in Edmonton.
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