Multi-Family Real Estate

Apartment building exterior

Multi-Family Real Estate

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 the individuals listed on the Forbes 400 list have significant real estate holdings. Real estate purchased after proper analysis and with the right management and financing structure in place has the unique advantage of offering generous returns that are commiserate with high-risk investment options, while maintaining a risk profile similar to that of the bond market. The following are some of the advantages that Multi-family Real Estate offers:

Profitability 

Real Estate is one of the few investment sectors that can potentially garner 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 makes a great 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 or eliminate 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 counteract misfortune.

Cash Flow

Tenants pay monthly rent, which covers all expenses and provides profit for the owners.

Amortization

Tenants pay down the debt, which increases your equity, creating long-term wealth.

Leverage

You are able to leverage real estate, allowing for the purchase of $100 million (100%) with only $25 million (25%).

Appreciation

Real Estate appreciates in value over time, growing long-term wealth.

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. As other investment sectors have experienced huge fluctuations in value, multifamily properties with proper management and debt structuring remain largely unaffected by these variances. Adverse market conditions have minimal negative effect on rental demand.

Control

Owners/Managers dictate the value of the asset, not the market.

The Trend

Baby Boomers and Millennials are trending towards renting, and there is a shortage of affordable housing.

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.