Investing in multifamily properties can boost your portfolio with a great return on investment
The demand for a place to live is something that will never go away. There will always be a demand for homes and a demand for rental property. Both baby boomers and millennials, the two fastest growing groups of renters, are choosing to rent because it offers a more flexible—and affordable—lifestyle than homeownership. For investors looking to diversify their portfolio or invest in real estate, multifamily properties are a great way to generate both short-term income and long-term capital appreciation.
If you’ve been thinking about investing in real estate, here are 5 reasons why multifamily properties are a good investment:
Stability and Predictability
Although the future is inherently uncertain, when it comes to investments, no market is more stable and predictable than the real estate market. Most rental properties retain their value and will appreciate over time, and when combined with proper asset management, they can produce immediate cash flow and a stable income stream.
Leverage
Multifamily investment property offers the ability for investors to use leverage. The use of proper leverage produces much higher returns on your investments.
Tax Benefits
There are a multitude of tax advantages to owning multifamily investment property. Costs such as mortgage interest, property taxes, operating expenses, insurance and depreciation can all be deducted from your taxes. Investment property offers some of the most tax advantaged cash flow available to investors.
Hedge Against Inflation
While inflation typically hurts stocks and bonds, multifamily properties are one of the few assets that react proportionately to inflation. As the value of your property increases, so does the amount of rent you are able to charge.
Control Over Your Investment
There are a variety of ways you can grow your multifamily property’s income and value, such as increasing gross rental income, reducing operating expenses, identifying tax deduction opportunities and forcing appreciation. When you force appreciation, you can implement improvements that result in increased property values, higher rental rates, and increased cash flow.
Jumping into the multifamily property game can often be overwhelming and intimidating when done alone. Whether you’re looking to invest in rental properties for the first time or simply expand your growing real estate portfolio, our experienced multifamily advisors can help you attain the long-term success and investment results you want. To learn more, contact us today.
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