You need to research and assess certain factors when purchasing a multifamily property. It is in fact a good property investment when you do so. But if you want to make good profit out of such investment, take into account important factors such as the property location, tenant history, profit, condition and nearby amenities.

Know pertinent facts about the neighborhood before signing the mortgage. Consider the vacancy rate in the area along with local construction trends. If cheap houses abound in the location, that would lead to a depressed rental market.

Location is one main factor that determines the value of a multifamily home in Owings Mills MD. This principle applies to any building for that matter. A multifamily home located in an affluent area has higher appraisal than a property located in a low- income neighborhood.

Also assess tenant history. Were the tenants in the property long- term occupants and did they pay rent on time? If they are long term tenants and prompt rent payers, the property is likely to have greater value. Tenants who often move or fail to pay the rent costs the landlord money.

Calculate the profit, or your rate of return. Determine the rate by dividing the net income by the purchase price of the property. If a higher rate of return is foreseen, the property will value more than if it is going to generate minimal return. To determine the net operating income on the other hand, subtract your expenses (taxes not included) from the profit.

A property not in good condition and needing repairs normally has lower value. Otherwise, if it’s a multifamily home with new carpets, fresh paint and updated kitchens, it’s worth will be more substantial. If the property has an attractive exterior, more buyers and renters will be interested and this increases the value.

Amenities, by all means, give more worth to a multifamily property. Is there an on- site pool, exercise room or tennis court, for instance? Or is it located near the park? These, too, could attract renters making the property more valuable.

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