Financial Advantages of Multifamily Investment


Ashcroft Capital pic

Ashcroft Capital

Real estate executive Frank Roessler is the founder of Ashcroft Capital, LLC, in Westwood, California. As a principal of the firm, Frank Roessler oversees a broad range of real estate transactions within the multifamily sector.

Multifamily real estate offers a number of advantages over single-family homes. By their very nature, multifamily apartment buildings provide a large number of rents instead of one rent from a single family. Because the loss of one or two rents represents only a small fraction of overall rent payments, multifamily real estate minimizes income-related risks for investors.

Another advantage of multifamily real estate involves economies of scale, or the incremental reduction of per-unit cost as the total number of units increases. In multifamily real estate, one way this translates is having to hire only a single property management company to look after the entire property, even though the property may contain many housing units. Whereas eight single-family homes would require eight different landscaping and maintenance operations, an eight-unit multifamily property requires only one. Other economies of scale advantages include security, laundry services, and recreational amenities.