Get our expert advice on which types of multifamily properties are worth investing in

With rental demand stronger than ever, multifamily investments look set to weather any storm.

Whether you’re a first-time investor or you’re looking to diversify your portfolio, multifamily assets can help you secure a great return and ongoing cash flow. But which types of multifamily properties are particularly poised to do well in 2020 and beyond?

Our top multifamily pick: Older properties with potential

These types of multifamily properties offer tenants a more affordable rental option than newly constructed units, and we’re seeing more and more competition for older multifamily with value-add potential.
The reason? These properties often give buyers the chance to make simple improvements that can have a big impact on their net operating income. Improvements can include renovated kitchens and bathrooms, upgraded amenities and common areas, and smart technology like locks and thermostats.

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Finding the right multifamily property

If competition is too fierce in your preferred primary market, it’s worth looking into secondary and even tertiary markets.

Here, the absence of new apartment supply coupled with typically older multifamily inventory means there may be even higher demand for modernized units. Focus on locations that have strong job growth and several major employers in the area. If you need help, an experienced multifamily advisor can guide you.

Overcoming challenges with these types of multifamily properties

If you are planning to make improvements to your newly acquired multifamily asset, you may find it’s hard to make the right changes while still keeping rents reasonable and also ensuring you’re getting a good return on investment.

Our advice: look for an older multifamily property that’s already been recently renovated. This way, you’ll save yourself the immediate expense of making improvements, and you’ll give yourself the freedom to make other changes over time to drive rents.

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