Over the 25-year period from 1992 through 2017, multifamily real estate provided the highest average annual total returns (9.75%) of any commercial real estate sector with the second lowest level of volatility (7.75%), according to research cited in a 2018 report by CBRE, the world’s largest commercial real estate investment firm.
Nation of Renters
A recent study from Harvard shows that America is increasingly becoming a "Nation of Renters", driven by various demographic shifts such as Millennials, across the nation, increasingly prefer to rent vs buy. Baby Boomers are preferring to downsize and enjoy the benefits of low to no maintenance Supply/Demand dynamics of...
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Economies of Scale
Multifamily offers economies of scale in multiple aspects such as physical structures, portfolio growth, operational efficiencies to name a few and reduces the risk that is inherent in single family investing. Physical Structures: Typically each multifamily building will have multiple housing units. For instance, a 100 unit community might be...
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Forced Appreciation & Cash Flow
Value-Add Investing in Multifamily is a great way of creating passive income streams and also capturing the appreciation in equity. Cashflow: Stabilized multifamily assets can generate steady income and the cash-flow, net of operating expenses, gets distributed to investors (mostly quarterly.) Working with CPAs and other advisors, sponsors can structure...
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Professionally Managed
Professional 3rd party management companies manage the day-to-day operations of these properties. Moreover these investments are run as real businesses and are valued financially based on the typical financial statements such as income statement, rent rolls etc. 3rd Party Property Management: 3rd Party property management companies are engaged to manage...
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Tax Benefits & Favorable Financing
Multifamily offers multiple tax advantages such as, depreciation expense, 1031 exchanges, accelerated depreciation using cost segregation etc..several other asset classes such as stocks, funds, etc do not provide. Moreover the sponsors can provide higher returns on the investments by deploying leverage provided by various financing options such as loans from...
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Win-Win-Win
Investing in MultiFamily housing assets creates a 'Win-Win-Win' scenario for all the stakeholders involved. Investors: Multifamily housing provides a very stable and conservative investing avenue for investors both in boom and bust cycles of the economy. These investments protect, build and increase investors capital and provide opportunities to create generational...
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