What is a multi-family home?

With population growth and the continuous expansion of urban areas, real estate investment has experienced a significant increase in demand, particularly within the multifamily housing segment. This type of development has gained prominence due to its ability to accommodate multiple households on a single plot of land, efficiently addressing contemporary housing needs.

Although the market for existing properties remains strong, an increasing number of investors and private individuals are showing interest in the construction and acquisition of multifamily residential buildings, especially new developments. However, the lack of clear information regarding what multifamily housing entails—its legal requirements, benefits, and challenges—often discourages potential investors from moving forward.

In this article, we provide a clear and objective explanation of what multifamily housing is, its role in modern society, and the main advantages and disadvantages of this type of real estate investment, enabling informed and well-grounded decision-making.

What Is Multifamily Housing?

Multifamily housing refers to a building or group of buildings located on a single plot of land that contains two or more independent residential units, each intended for occupancy by different families.

This concept includes various typologies, such as:

• Residential apartment buildings

• Gated communities

• Semi-detached or terraced housing developments

• Residential lofts

• Collective housing complexes or residential developments

Compared to single-family housing, this model maximizes land use and allows for higher residential density.

Examples of Multifamily Housing Projects by MJARC Arquitetos

Green View Tower, Covilhã

Multifamily Housing, Coimbra

Riverside Condominium, Santa Comba Dão

The Importance of Multifamily Housing in Society

Throughout history, housing has evolved in response to population growth, urban development, and social well-being. As cities expand and available urban land becomes increasingly scarce, multifamily housing has emerged as a critical solution for accommodating a growing number of residents within limited areas.

Today, multifamily developments play a fundamental role in urban planning by enabling:

• More efficient land use

• Reduced urban sprawl

• Increased housing supply in central and consolidated urban areas

For this reason, multifamily buildings dominate city centers and represent an effective response to the demands of modern metropolitan living.

Advantages and Disadvantages of Investing in Multifamily Housing

As with any real estate investment, acquiring or developing multifamily housing requires careful planning. When well located and properly designed, it can represent a profitable and sustainable investment in the medium and long term.

Nevertheless, understanding both the benefits and potential drawbacks is essential before proceeding.

Advantages of Multifamily Housing for Individual Unit Owners

• Shared maintenance costs: Maintenance and improvement expenses are distributed among all condominium owners according to ownership shares, making them more cost-effective than single-family homes.

• Enhanced security: The presence of multiple households increases perceived safety, often complemented by optional 24-hour security services.

• Access to shared amenities: Multifamily condominiums may include common areas such as swimming pools, gyms, gardens, lounges, or recreational spaces, enhancing residents’ quality of life.

Disadvantages of Multifamily Housing

The main disadvantage associated with multifamily housing is the higher initial investment, particularly in new construction projects. These developments involve multiple residential units, shared infrastructure, and greater technical complexity.

To mitigate this challenge, it is essential to:

• Define a clear budget from the outset

• Develop a realistic financial plan

• Establish strategies to generate returns through unit sales or rental income

Rehabilitating an Existing Multifamily Building: What Should You Do?

Although less common, it is possible to inherit or acquire an older multifamily building requiring rehabilitation or renovation. In such cases, refurbishment can represent an excellent investment opportunity, allowing for property appreciation and additional income generation.

Before proceeding, it is crucial to assess:

• The building’s structural condition

• Rehabilitation and construction costs

• Legal and urban planning constraints

• Post-intervention valuation potential

Who Should You Contact to Develop a Multifamily Housing Project?

Whether through new construction or rehabilitation, investing in multifamily housing can be highly advantageous. However, project success depends directly on selecting an experienced and qualified technical team capable of managing all stages of development.

If you are considering a multifamily housing project and require technical guidance, clarification, or a detailed cost estimate, please contact us. We would be pleased to assist you in transforming your project into a solid and successful investment.