Here are 8 reasons why it’s smart to invest in multifamily real estate.
- Positive Cash Flow and High Returns
We buy properties that will return 5-8% cashflow distributions on a monthly or quarterly basis to our investors, plus a large payment once we renovate and sell the apartment building. So for example, if an investor partner invests $250,000 on a deal, they would receive approximately $12,500-$20,000 annually until we sell the property. At that point they would receive their original investment of $250,000 back, plus their share of the profits from the sale of the building. - Appreciation
Real estate prices have historically steadily increased over the years, especially in this inflationary market. - Higher Stability Than Single Family Homes
If a tenant moves out of a 100-unit apartment building, it’s not a big deal since you have income from the other tenants. But if a tenant moves out of a single-family home, then you re 100% vacant and you lose 100% of its income. The more units you have the more protected you become. - High Demand
There is a lot of money out there hunting for high return investments. Apartment buildings are rare, and billion-dollar institutional companies are chasing these very same assets as we are. Demand for apartments is high as there is a limited supply of lower income housing. There are simply not enough homes to support our growing population, and that’s going to continue to add more pressure to real estate prices going up in the future. - Economies of Scale
Operating a 100-unit multifamily apartment is less expensive than operating 100 single family rentals. Property management companies may charge 10% to manage a single-family home, in a 100+ unit, they charge a bulk-discount of around 3%. This drives returns, provides excellent service, and promotes a strong community in one location. - Real Income Generating Assets
Apartments are real. I can see, visit, and touch the asset. This gives you more control of the investment. Your investment is backed by an income generating asset, so not only do you benefit from the asset going up in value you are also receiving cashflow. Real estate is also a hedge against inflation. There are trillions of dollars being printed into the money supply, making each dollar worth less every day. Buying physical assets has always been the best way to protect wealth in an inflationary market. - Tax Incentives
You can depreciate buildings which helps to lower your taxes. - US Diversification
Purchasing apartments in the US allows you to diversify your investments benefiting from the US dollar, which is the world’s reserve currency.
If you are interested in learning more about how you can create significant wealth through multifamily real estate, click here to schedule a call with our investor relations team.
