A fourplex is a building with four separate single family units to make maximum use of the limited land available. There are several fourplex designs, including those that have all the units on the same floor (the ground floor) and those with several floors with one unit on each floor. Each unit in a fourplex may be one-story or two-story. The most common implementation of fourplex plans in infill areas is a two storey building that is subdivided into 4 units.
An infill fourplex home is an excellent investment vehicle as it offers four living spaces for the price of one. It is much sought after by tenants if it is built in or near a commercial or industrial area with plenty of business and employment opportunities. This makes it highly attractive to buy-and-rent landlords. At the rate home prices are going up currently, you can soon make a profit on your newly built infill fourplex.
Here are some tips on how to maximize your real estate investment with infill fourplex plans:
- Choose an infill property right where the action is: An infill fourplex built in an urban centre is highly sought after by both homebuyers and investors as it has the potential to become a highly valued property. The cost of the initial land purchase may be high, but so is the return. Whether you plan to rent the units out to tenants or sell the house, the return on your investment will far outweigh the total costs.
- Buy a preconstruction infill fourplex: As an investor, you would want to buy a house that makes you money on the appreciation of value. A preconstruction infill fourplex is perfect for that as it costs considerably less than a resale fourplex. There will also be no maintenance costs until the house is completed. In a healthy housing market, the price appreciates every year and by the time the house is completed, you can make a tidy profit without doing much.
- Leverage your down payment: One big advantage of investing in real estate is that you can leverage your down payment. Since housing prices rise every year, lenders are often willing to lend large amounts of money at very low interest rates. You can use this to your advantage by paying only 20 to 30% as down payment and financing the rest. When the price of your fourplex rises, what really happens is that you will be making profit on your small down payment less the interest on the loan.
- Patience is to key to success: Sometimes home prices rise dramatically overnight, but that requires special circumstances. What usually happens is that home prices appreciate gradually over a period of time. Except in times of housing crisis, home prices can even rise by up to 10% every year. So the key to making a neat profit is to be patience and wait until you get the right price to sell your investment property.