Are you considering investing in multi-family real estate in Burlington, Vermont? If not, maybe you should be! Burlington’s rental housing market is tight. Homebuyers and investors from outside of Vermont moved to the state searching for more affordable housing compared to their bigger city counterparts.
Everywhere you look, new people are moving in, and many Vermont locals are searching for affordable rentals. That means there are renters in Burlington looking for rentals in their budget and with low vacancy rates, it’s the perfect time to start investing in multi-family properties.
Continue reading to learn why you should invest in Burlington’s multi-family real estate market.
Investing in real estate is a great way to diversify your investment portfolio. If you want to get into real estate, there are a lot of great ways to get started. Multi-family real estate can offer investors a lot of benefits, including reduced risk and scalability. But some of you may be wondering why you’d want to invest in multi-family properties in Burlington.
Multi-family homes are the way to go if you want to grow your real estate portfolio. It's much easier to buy a ten-unit apartment building than it is to buy ten single-family homes. In addition to working with only one seller instead of 10, you only need one loan instead of ten separate loans for each single-family home.
Moreover, the cost of a multi-family home and single-family home is near the same median sale price. From January to June 2021, single-family homes had a median sale price of $360K and multifamily homes were around $415.5K. Now, remember, a single-family home means one passive income, whereas a multifamily home offers multiple unit incomes to pay down the property mortgage.
If you own a single-family home, and it sits vacant for a couple of months, you're still responsible for the mortgage payment. If you invest in multifamily property and one of the units is vacant, the other units will cover your expenses and hopefully still generate cash flow. Multi-family properties protect investors from many of the risks associated with being a real estate investor.
As we mentioned above, multi-family homes do cost more to purchase than single-family homes. However, the individual cost per unit might be way less. For example, a single-family home in your neighborhood may sell for $120,000, while a four-unit building may sell for $250,000. Even though the multi-family home is more than twice as expensive, each unit is only about $62,500, nearly half the price of the single-family home. A multi-family building tends to be much easier to finance due to its overall cash flow and the lower amount of risk the lender takes on.
You can easily reap the benefits of these beautiful multi-family homes, whether they are small, two-unit duplexes or large, multi-family buildings. Rent out the units or move in with extended family, so everyone can have their own space while still being together. In Burlington, you'll be close to the best features Vermont has to offer: Lake Champlain, Church Street Marketplace, nearby mountains, and more!