Many people in Florida who choose to invest in commercial real estate do so with similar goals in mind. Often, a main goal involves figuring out a way to generate passive income through commercial real estate investments, and this is particularly common among retired investors, or investors nearing the age of retirement.
According to Bankrate, many people who invest in real estate choose to do so by investing in either a single-family or multifamily property.
Pros and cons of investing in single-family homes
In general, the process of investing in a single-family home tends to be easier than investing in a multifamily property. This is true for several reasons. First, those who invest in single-family properties do not have to manage multiple tenants. Second, it tends to be easier to secure a loan for a single-family property than it does for one that houses multiple families or tenants. On the other hand, single-family properties do not generate as much in terms of rental income. Also, if an investor puts money into multiple single-family properties, managing them may prove difficult if they are far apart from each other.
Pros and cons of investing in multifamily homes
Investors may find that there is greater potential for steady, regular income when they put their money into multifamily properties. There may also be an opportunity for an investor to live in the building in addition to making money off of it. On the other hand, it is often tougher to get a loan for this type of investment property, because if it has more than five units, a commercial loan becomes necessary.
Both options offer tax benefits, too, although investing in a multifamily property may lead to more substantial tax perks than investing in a single-family property.