Why Multi-Family Investing is a Must
Here’s why we like investing in multi-family apartments for growing your future wealth. We see continuing past performance and trends pointing towards the increasing demand for multi-family residential property.
Let’s dive into our top 10 reasons.
1. Increasing demand for apartment living and rentals
Millennials, the largest generation in US history about 73 million of them have less desire to own a home due to large student debts, making it difficult to purchase a home. They are the largest pool for renters and renting is a more affordable option. Baby Boomers, about 72 million in this group, a large number are downsizing and enjoy the convenience of renting.
2. Strong multi-family sector
The apartment industry contributes more than $3 trillion into the U.S. economy each year, according to Hoyt Advisory Services Study. This is great for landlords and owners.
3. Passive cash flow
With multi-family, you earn passive and stable monthly cash flow through the acquisition of well-positioned, stabilized properties. Earn returns while you enjoy the things you love to do.
Multi-family investments have lower vacancy risk than other property types and historically has been the strongest performing real estate asset class.
5. Capital appreciation
The value of the investment increases through property improvements and professional property management. Rents are increased and expenses reduced, thereby increasing the property’s net operating income.
6. Reducing your risk
Multi-family tends to be protected during a recession as people downsize to apartment living. Compared to single-family homes, your vacancy risk is spread as you have multiple renters paying down the mortgage. Multi-family syndication deals provide the opportunity to pool your capital with others into high-value assets with potentially high returns while reducing your overall risk.
7. Investment backed by a hard asset
The investment is backed by a hard asset, the building, and is not going away.
8. Equity growth
With tenants paying down the principal on the loan, your equity in the property increases which is paid out when the property is sold.
9. Tax Benefits
You can further reduce your earned income tax through the property’s depreciation schedule.
10. Growing your portfolio quicker
Multifamily investing is good for investors who want to build a larger portfolio of rental units quicker than purchasing multiple different single-family homes. For example, investing in an apartment building is more time-efficient than buying 20 single-family homes where you would need to work with 20 different sellers, inspections, loans.
We hope this gave you some reasons to explore multi-family investing and consider another asset class to diversify your investments, furthering your path to building wealth and passive income for your family.