Learn from the experts: our top 3 tips for multifamily investment success
Investing in multifamily real estate can be a very lucrative opportunity.
Not only is multifamily historically resilient, it’s also proving to be capable of weathering the incredibly stormy economic conditions brought about by the COVID-19 pandemic.
As rental demand holds steady across the nation, many real estate investors are turning their attention to building a multifamily investment portfolio.
But how do you do it successfully?
1: Make an investment plan
Before you begin, it’s important to think about where you want to take your investment.
“A lot of first time multifamily investors want to start with something small, but they don’t necessarily have a plan of action,” says Joe LaFleur, multifamily investment advisor at 100Units.com. “Many of these investors lack a plan of what they’re going to do with their investment over the next 1–5 years. And that can be a big mistake.”
A good first step is to get to grips with your target location, research the market conditions, and choose the asset class (or asset classes) that match your investment goals. This way, you know exactly how much work you’re committing to put into your investments before you begin.
Why invest in multifamily over other types of real estate?
2: Understand the economies of scale
“The really successful investors that I’ve seen and worked with over the past decade have been the ones that had a plan,” explains Joe. “More than that, they fully understood that there were huge economies of scale to be had in multifamily investing.
“Their intention was never to buy 10, 20, 30 units. Their intention was always—from day one—to drive towards the goal of having 100+ units under their portfolio. Why? Because economies of scale like these make it so much more profitable to operate properties.”
3: Choose a trusted advisor
Buying apartment buildings can be a challenging process, especially if it’s your first time. If you’re hoping to build a multifamily investment portfolio that will bring reliable, healthy returns for years to come, you should consider hiring a trusted advisor.
An experienced multifamily advisor will analyze market conditions, multifamily trends, and local competition to help you identify the investment opportunities that align with your goals—including the deals that less experienced investors may miss.
More multifamily investment help:
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