There are many different types of investments in the real estate world—from land, to single family, to wholesaling and more—but one of the investments that makes the most sense is investing in multifamily properties.
While Grant Cardone may be extreme in some of his views, after owning 4,000 apartments he makes some good points about multifamily investing in this Business Insider article.
Let’s look at some reasons why multifamily investments make sense.
1. Vacancy Not as Large of an Impact
Having a multifamily property means that you have multiple units to rely on to contribute to your monthly cash flow. That means vacancy isn’t as big of a risk compared to single-family rental properties where a vacancy means zero income.
With a multifamily property the odds of every unit being vacant at the same time are small. This means that while your profit may not be maximized, you will most likely still be making a profit or at least covering your operating expenses.
2. Demand for Rentals on Rise
Millennials who are strapped in college debt aren’t able to purchase homes until an older age compared to previous generations. This means demand for rentals will continue to increase over the next few years.
In fact, according to a report from the Urban Land Institute, investment in multifamily properties hit an all-time high at the end of 2015 and was met with quick demand absorbing new units as well. Some of the highest demand was seen in California metro areas as well as major metropolitan areas such as Dallas, Washington D.C. and Atlanta.
3. Multifamily Can See Greater Gains in Value
With many areas of major cities being revitalized in a similar fashion to Brooklyn, multifamily units can be purchased in up and coming neighborhoods where the value of the property is expected to appreciate. As neighborhoods transform into more desirable live/work/play areas, you should be able to see a value increase of the property from when you purchased.
4. Bigger Returns
Multifamily properties can result in bigger returns on investments over time and large cash flows as there are multiple contributors to monthly income. This can be attractive to investors and bring in more capital.
If you're interested in investing in multifamily, check out the properties on Patch of Land. Invest today!
