Many people find that the easiest type of commercial investment property to get involved with is multifamily homes. With multifamily homes, you are getting multiple streams of revenue. You are also working with other individuals and families, not businesses, so it can be a little easier to understand what your potential tenants are looking for and need from a home, as you share that need in common with your potential tenants.
There are multiple types of multifamily homes you can invest in when it comes to commercial real estate.
Type #1: Senior or Assisted Living
Senior housing or assisted living housing developments that are geared towards the senior population are generally located in areas that already have a large senior population, making the transition from a single-family home to a senior living community easier on the tenants.
Senior and assisted living communities have to be built in a way that caters to limited mobility. With these types of homes, you also need to provide meal service, housekeeping, and medical care. Senior and assisted living communities are multifamily options for people with more advanced investment and management experience.
Type #2: Student Housing
Student housing is entirely location-based. Student housing is always located near universities and colleges, be it two-year colleges, trade schools, or four-year colleges and universities.
With student housing, you are working with individuals who may be more interested in nine-month instead of year leases. You are also working with a population looking for more community socialization, which is different from other apartment communities, where residents are looking for privacy.
Student housing can be successful if you understand the unique needs of student renters.
Type #3: High-Rise Apartments
A high-rise apartment is generally a building that is at least twelve stories high and has over a hundred units. A high-rise apartment may have retail businesses, such as cafes or restaurants, located on the first floor. High-rise apartments are usually located in urban cores, with a focus on the walkability of the location.
Type #4: Mid-Rise Apartments
A mid-rise apartment is usually somewhere between four to eleven stories tall and could have anywhere from twenty to over a hundred units. A mid-rise is found close to the urban core but not right inside the urban core. There is a big demand for urban living, and mid-rise apartments can help to achieve that.
With these types of buildings, walkability to nearby conveniences is a selling feature. In competitive markets, special community features, like a workout area, a library, a computer lab, a recording studio, and pet washing stations, can make a building stand out.
Type #5: Garden Apartments
A garden apartment building is under four stories tall. Multiple garden apartment buildings are often grouped and provide community features such as playgrounds, dog parks, fitness centers, and laundry rooms. They are found in more suburban areas.
Type #6: Duplex/Triplex/ Quadplex
Duplexes, triplexes, and quadplexes have more of the feeling of a single-family residential home, with the property more shaped like a home, with different entrances for each unit. Generally, each unit is about the same size.
If you want to get into multifamily commercial homes, there are six very different types of buildings you can invest in that will provide you with multiple revenue streams. The key is to find a kind of property that you will feel comfortable managing and owning and that fits your budget.