Why invest in multifamily over other types of real estate?

August 20, 2020 | Buyers

Learn why demand and performance makes multifamily an ideal investment opportunity

If you’re going to invest in an income-producing asset, it’s important to choose the type that best matches your investment goals.

Real estate as a whole presents numerous investment options. These include:

Commercial Real Estate 

– Retail

– Office

– Industrial

– Multifamily (usually 5+ units to qualify as CRE)

Residential Real Estate

– Single Family

– Vacation Rentals

– Small Multifamily (<5 units)

Land Real Estate

– Land for Commercial development

– Land for Residential development 

– Land for Farming

– Land for Mining.

Out of so many available options, why invest in multifamily? We’re here to help you answer that question.

Join us as we shine a light on some of the advantages of investing in multifamily. Plus, we’ll share some of the considerations you must bear in mind before you do.

People will always need a place to live

Simply put, there’s always going to be a demand for multifamily. If the economy is good, the market will be full of tenants who are prepared to pay more, who want to find a nicer place. If the economy is tough, they’ll want to scale back, save some money, maybe downgrade to a smaller location.

It can be a very different story for office and retail investments. In an economic downturn, you’re likely to experience longer vacancies where you may struggle to find new tenants to lease your space.

This is why multifamily—and especially affordable multifamily—can be a great choice for investors.

Market performance resilience

Multifamily has a track record of outperforming other types of real estate investment. And while the current market situation continues to evolve, history has shown us that the performance of multifamily tends to be more stable and resilient than other investments during an economic downturn or recession.

More control over outcomes

Multifamily is more operationally intensive than other investment types, which means you can be more hands-on if you desire. There is a great deal of active management involved: people moving in and out on a regular basis, rent that needs to be collected on a monthly basis, leases coming up every year, and more.

With multifamily, there are continuous decisions to be made.

– How much do I bump the rent?

– Which tenants do I keep?

– Which tenants do I replace with new ones?

– Do I want to make any unit upgrades? 

Each one of these decisions impacts the value, the income, and the performance of your multifamily investment. In this way, you as the owner can dictate and have more control over the return on your investment.

With this in mind, your efforts can be greatly rewarded! That’s why multifamily can be an excellent option for investors who are prepared to be more hands-on.

Learn more:

How to choose the right asset class to match your investment goals

So, why invest in multifamily over other investment types?

Multifamily investing is not for everyone. We advise you to look for other options if you want a completely passive, hands-off investment.

However: if you are prepared to be more active with your property, multifamily can be a great choice—with plenty of opportunity to influence performance and increase your return on investment.

Looking for a multifamily investment opportunity?

Browse our selection of available properties or contact us today.

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