WHY MULTIFAMILY?

WHY MULTIFAMILY?


Historically, Real Estate has proven to be one of the most secure and financially rewarding investment sectors. It is not a coincidence that the majority of individuals listed on the Forbes 400 list have significant real estate holdings. Real estate purchased using proper analysis, conservative financing, and meticulous management has the unique advantage of offering competitive returns that are commiserate with higher-risk investment options while maintaining a lower risk profile. The following are some of the advantages that Multifamily Real Estate offers prospective investors.

Profitability

Real Estate is one of the few investment sectors that can potentially generate consistent double-digit returns, while insulating invested capital from market fluctuations and economic variances. This blend of resiliency and profitability is a major reason why real estate investment can be a prudent choice as a diversifying strategy in any portfolio.

Tax Benefits

Real Estate owners enjoy added tax advantages that most other investment sectors cannot rival. The ability to reduce and/or defer the tax liability of one’s income on a dollar for dollar basis through depreciation is one example of the many advantages of real estate investing.

Inflation Hedge

Investing in multi-family real estate is considered to be one of the best ways to hedge inflation. This asset class gives the owner/manager the ability to adjust rental rates on a daily basis to capitalize on opportunity or mitigate challenges.

Cash Flow

Residents pay monthly rent that covers all expenses and, once the community is stabilized, a monthly partner distribution for investors.

Amortization

Residents pay down the debt, which increases your equity, creating long-term wealth. This also allows for cash-out refinances as value is added and the community matures.

Leverage

The reliability of Real Estate is also attractive to lenders, and allows an investor to scale into larger opportunities that would otherwise be unattainable. Well-financed debt can lead to exponential returns when managed correctly.

Appreciation

Real Estate has proven time and time again that it appreciates in value over time, growing long-term wealth. With a severe lack of housing in the United States, multifamily real estate is positioned to continue its ascent in the coming years.

Stability

Real Estate is a foundation for true wealth accumulation that has stood the test of time. Real Estate is less volatile and has historically outperfomed the S&P 500. Most other investment sectors have experienced significant fluctuations in value, whereas multifamily properties with proper management and debt structuring remain more insulated by these variances. Adverse market conditions have minimal negative effect on rental demand.

Control

Owners/Managers play a significant role in determining the value of a community, and the market plays a secondary role. The success of a community that was conservatively underwritten and purchased responsibly is ultimately in the hands of the operators, a level of control that is impossible to attain when investing passively in equities or many other vehicles.

The Trend

Baby Boomers, Millennials, and Gen Z are trending towards renting, and there is a shortage of affordable housing. Younger generations are delaying the formation of a family unit, which also drives up the demand for apartments.

Legacy

Real Estate offers investors the ability to pass on solid, physical assets to their inheritors. Tangible real estate assets, when carefully selected and managed properly, can provide long-term returns and income that can be a source of financial stability and wealth for generations. 
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