Things to Check While Buying a Multifamily Property
You must be thinking about the perks of being a landlord of a multifamily property. When we talk about multifamily property, we related it with the multiple streams of income coming from the same property. Well, it’s true but there are a lot of things to be taken into the account if you want your property to be ideally profitable. You will need to focus on those things while purchasing a multifamily property.
Property Operating Statement of 12 months
Remember, current statement or the one predicting better profitability in the future doesn’t matter when you are deciding to purchase a multifamily property in order to run a renting business. You will need to track the progress the property would have made in last 12 months. The benefit of looking at track record is that you will be able to know about the fluctuations in business.
When you purchase a multifamily property, you will need to know about the rental history of this property. You would need to have the record which is going to give you the information about lease granted to the tenants. You can compare this rent roll with the statements by seller. Make sure that lease in the rent roll matches with the one written in the initial documents by seller.
Beside information about taxes, the tax bill can let you have good insight about the type of property and its value in the real estate market. Another factor which you can know about by viewing tax bills is the motivation level of the seller.
Make sure that previous landlord doesn’t owe any free rents to any of the tenants while you purchase the property. You will need to ask for the copy of all of the leases.
This factor comes in continuation of the one mentioned just above. You will need to have information about the services promised to certain tenants living in the property. For instance, you might have to provide laundry service or internet to a few tenants living in the property as they pay for it; and, hence, it is the part of their lease.
This one is very important. You have to have information about everything related to the property you are going to own. However, it may turn out to be very difficult to carry out this inspection on your own if there are many units in the property. Therefore, you can have services of professional inspector.
Competition in the market
An important factor among the list of factors is the market competition. You have to make sure that your property can do good in the presence of other properties of same type in the neighborhood.