Back in January we shared our Top 3 Reasons to Invest in Multifamily Property, and today we are bringing you 3 more. Why? Multifamily property has been posting a few years of advanced growth, with a particularly strong showing in 2016, and based on all projections the good times are on pace to keep rolling.
As commercial real estate Brokers it is our job to advise our client investors where to spend their dollars, and with the multifamily property sector’s recent performance…it’s a no-brainer. Last year Multifamily was leader of the pack, outperforming all other CRE sectors with the lowest vacancy rate of any property type.
So, to help you, the commercial real estate investor, decide what to include in your portfolio, here are 3 more reasons why you should invest in multifamily property.
For an in-depth look at 2017’s projected multifamily market performance, and a review of 2016, see this Multifamily Outlook Report from Freddie Mac.
Demand is Increasing
It’s a commercial real estate fundamental – increased demand means increased value, and no other sector sees more demand than multifamily property. This increased demand is attributed to the buzziest of the buzzwords in the past few years – Millennials. Not only are Millennials more prone to leave the nest and seek independence, they are less likely to purchase and own a home, steering this huge population segment right into the waiting arms of multifamily assets.
The reason for this shift lies in our current climate of unsteady political and economic conditions. Volatility steers away Millennials, and everyone else for that matter, from risky home ownership and towards the affordability of rentals.
Bottom line, the multifamily pipeline remains clear and as long as there are renters, this investment is a safe bet.
Less Risk Means Easier Financing
While the cost of a multifamily property is significantly higher than some of its commercial real estate counterparts, it is so desirable because of its income-producing potential. Realized through monthly rent collection, this asset type provides multiple lines of steady cash flow (multiple units collecting multiple rents) and therefore in the eyes of a lending institution is virtually risk-free.
After all, the more income a property generates, the higher its value. Any property that retains value will earn you easy financing at some of the lowest rates available on market.
Portfolio Growth Is Fast and Furious
No other commercial real estate sector allows you to make an investment splash like multifamily property. That is why this sector is ideal for investors who are seeking to build a large investment portfolio in a short amount of time with as few acquisition transactions as possible.
Think about it. If you are focusing on industrial assets you are buying one property at a time, which usually houses one tenant. By comparison, with one multifamily property acquisition an investor can acquire anywhere from 4 to 200+ units at once. This means one property, one address, one loan, one seller, one negotiation, one transaction…and numerous cash flow streams. Sounds like a super efficient no-brainer to us.
Looking to Invest in Charlotte Multifamily Property?
If you are seeking to invest in multifamily property in and around Charlotte, NC let our team help. With over 50 years history buying and selling assets in the local multifamily market, our expert team has vast transactional experience. From helping clients understand market conditions to finding availabilities to navigating the various challenges that arise during due diligence and purchasing stages, we can assist from beginning to end. Give us a call at 704.632.1000 today to see how we can help you meet (and exceed) your investment goals.
SVN | Percival Partners is one of Charlotte’s most recognized and respected commercial real estate firms with more than 50 years experience in the region. Our professional and experienced real estate Advisors are in the business of listening, understanding, and adding value. No matter the commercial property type you own or seek, you can count on the SVN | Percival Partners team to maximize your return and peace of mind. To reach us, you can call us at 704.632.1000 or follow us at @SVNPercival, LinkedIn or Facebook.