Diversifying Your Portfolio: Grand Rapids Single Family and Multifamily Investing

Apr 29, 2022 | Owner Education, Property Management Education

Smart investors ensure their real estate portfolios are diversified. Why? It protects you against risk and allows you to grow and leverage the assets you already own. 

We work with multiple types of properties and different levels of risk, and we’ve found that a diverse portfolio will allow our investor clients to scale their growth and build their ROI. 

The key is to rent out a good mix of multi-family properties as well as single-family homes. 

Here’s why this type of diversification can be beneficial.

Diversify with both Single-Family and Multi-Family Properties 

Single-family homes are usually fantastic investment opportunities, especially in the Grand Rapids rental market, where there are some great neighborhoods and growing suburban areas. Multi-family units come with their own benefits. They’ll provide more income and less vacancy risk.

Lower risk and higher cash flow are excellent reasons to invest in multi-family homes as well as single-family homes. 

Long Term Tenants and Higher Rents with Single-Family Grand Rapids Rental Homes

We always recommend single-family homes as ideal Grand Rapids investment properties because they are consistently easy to rent to highly qualified tenants. You’ll lease to tenants who want these properties because they value privacy and space and because they like the idea of homeownership but they’re not necessarily ready to take on all the costs and maintenance that may be required. 

Think about location when you invest in a single-family home. Tenants will be looking for good schools and proximity to shopping, restaurants, and entertainment.   

Single-family homes also offer investors impressive appreciation potential. These properties always increase in value, and in Grand Rapids, property values are on the rise. We see investors in the local market quickly cash flow a single-family home while building equity at the same time. The cost of a single-family home in Grand Rapids is still pretty reasonable, even in the current market. You’ll find that you’re able to earn consistently high rents.  

Vacancy Protection and Cash Flow with Multi-Family Homes

Multi-family PropertyA multi-family property can be many things. You will have the opportunity to buy a duplex, a triplex, or even a small apartment building with a dozen units or more. When you invest in a multi-family property, you’ll have more than one tenant in place, which means you have more than one income stream. 

This is the major benefit of investing in multi-family properties; you will have rent coming in from various sources. So, if one unit is vacant, you aren’t losing a lot of money quickly because you still have rental payments coming in from the other units. 

You’ll earn income quickly with a multi-family investment. Most rental property owners find their cash flow is nearly immediate when the properties are priced correctly and occupied by reliable tenants. 

There’s also the economy of scale working in your favor. When you need maintenance or landscaping services, you can contract with a vendor who is likely to provide a discount because of the volume of work you need. You’ll save time and money maintaining a single building with two or three units.  

Don’t fall into the trap of limiting yourself to one investment type. We can help you diversify your investment portfolio and provide expert Grand Rapids property management. To learn more, contact us at Short South Realty Group.