Benefits of Multi-Family Apartment Investing

Investing in Multi-Family Apartments

If you are looking for a good, secure investment where you can take a more active role in growing your capital, you have probably thought about real estate.

Often people think of real estate investment in terms of single-family units, but perhaps you should think bigger and explore multi-family apartment investing. Why?

The Benefits

While it might seem overwhelming, multi-family syndication is actually easier to finance and to operate. The initial outlay is higher, but banks are more likely to approve a loan on multi-family real estate because the generated cash flow is healthy; even if one tenant moves out, the majority of the property is still occupied. Therefore, there is considerably less risk involved.

It’s easier to operate because hiring a property manager makes good financial sense; this way, someone else can take care of the day-to-day operations of the apartment management without their percentage cutting too much into your margins.

This type of workforce housing is also a market segment where there’s high security in investment. Why is it such a secure investment?

The Market

Multi-family deals have been an active area of investment for several years now and that shows no sign of slowing down. Demand for affordable housing still outstrips supply; despite the fact that supply is growing, wage growth and higher levels of employment continue to feed this demand.

A stable workforce and a widening gap between high-end Class A properties and Class B and C apartments mean that people are constantly in need of affordable rental housing. Although more luxury developments are being built, the high rent leaves them sitting empty and demand for affordable, if updated, Class B apartments keeps growing.

Therefore, apartment investing is a safe bet for those looking to grow capital without stress.

Industry trends

In its seven years of growth, the multi-family syndication industry has seen a number of changes and trends. Currently, there’s an increasing focus on value-add apartment investments, with renters demanding affordable amenities such as fitness centers and car charging stations.

Related to this is the increasing interest in multi-family syndications that can offer high-tech features like online payment, smart home systems, and e-commerce delivery lockers. It’s these kinds of touches that could make your apartment investment pay out.

It’s important to note that the need for multi-family apartments has been driven primarily by millennials, so a successful investor needs to know what attracts this demographic. It’s no surprise, then, that amenities and technology have been recent buzzwords. Similarly, sustainability is another recent industry standard; millennial renters will pay a little more for an energy-efficient living place with energy-saving lighting, recycling centers and plenty of space for bicycles.

The Future

Certainly, in the short to mid-term, provided the economy remains stable, there’s likely to be slow and steady growth in the demand for multi-family apartments. Even as some demographics move towards single-family units, groups such as baby boomers increasingly focus on apartments.

If you are willing to be creative in how you develop your multi-family property, apartment investing is guaranteed to bring you steady appreciation in your portfolio, with minimal hassle. Despite some shifts in the market, it is still a healthy area of industry to start your investment.

• Optimistic Venture Group, LLC specializes in multi-family (apartment) investing.