5  More  Benefits  of  Multifamily  Investing  By  Giro  Katsimbrakis  October  29,  2013    There’s   no   two   ways   about   it–multifamily   real   estate   is   the   most   consistent   and  most   powerful   investment  vehicle   able   to   investors,   no  matter   what   your   financial  means.   In  addition  to  the  big  six  on  the  homepage,  here  are  some  more  reasons:    

1. Amortization.   As   tenants  make   their   monthly  rental   payments,   you   can  use   those   payments   to  pay   down   the   mortgage  on   the   property   to  increase  your  equity  and  net  worth.  

2. You  can  buy  below  market  value.  If  you  purchase  $40,000  worth  of  stock,  its  value   at   that   time   is   $40,000   (it   then  moves  up  or  down  with   the  market).  When  you  purchase  multifamily   real   estate,   you  can  get  units  on   the  cheap  for  any  number  of  circumstances,  creating  instant  equity  in  the  property.  

3. Going  back   to   the  stock  analogy,  when  you  buy   that  $40,000  worth,   there’s  nothing  you  can  do  personally  to  increase  its  value–you’re  at  the  whim  of  the  company’s   board   of   directors,   management,   and   consumers.   With  multifamily   real   estate,   you   can   take   action   to   increase   property   value–landscaping,   painting,   renovations,   perhaps   even   dividing   the   building   into  more  units  so  you  get  more  rents  coming  in.  

4. Multifamily   real   estate   provides  many   tax   advantages,   a   key   one   being   the  ability   to  depreciate   the  value  of   the  property  over   time.  This   costs  you  no  money  yet  it  can  provide  a  tax  loss  to  offset  your  income.  

5. You   can   obtain   cash   without   selling   or   paying   taxes.   If   you   purchased   an  apartment  building  in  1995  for  $1  million  with  a  $650,000  loan  and  now  it’s  worth   $2   million   and   your   remaining   loan   balance   is   $600,000,   you   can  refinance  the  property  for  $1.5  and  pull  $900,000  out.  Refinancing  a  property  isn’t  a  taxable  event,  so  you  don’t  have  to  pay  taxes  on  that  $900,000.