Real estate is a popular investment alternative for people who are unsure about withstanding the volatility of the stock market. It is also a great means to diversify an investment portfolio. Investing in real estate also allows investors to take more of an active role in growing their capital rather than putting their money into a fund managed by someone else. While options for real estate investments are many, As Kanat Sultanbekov mentions, an increasing number of investors are choosing to invest in multifamily properties for improved stability and growth.
Kanat Sultanbekov marks a few advantages of investing in multifamily properties
When it comes to residential real estate, an investor may choose to buy a single-family or a multi-family property. As its name implies, single-family properties have only one available unit to rent or sell. Multi-family properties, on the other hand, have multiple units. These properties can include Apartment buildings and complexes, Condo complexes, duplexes, retirement homes and more. Certain investors choose to buy neglected properties to renovate and sell to new owners, while others opt to invest in multi-family properties to earn rental income.
There are many factors that make investing in multifamily properties a good idea, including:
- Homes are becoming less affordable: Rising housing shortages and increasing home prices are causing many families and individuals to lean toward renting instead of buying. This shift toward rental housing accelerates the demand for multifamily units.
- Opportunities to buy property at buyer-friendly terms: Just a few years back, there was high competition in the multi-family real estate market, which drove property prices to high levels. However, with the interest rate hikes experienced in recent years, a number of investors have halted their property purchases. Such market conditions have created distinctive opportunities where certain real estate assets are available at lower prices than their potential value. Moreover, the prevailing market slowdown has opened up opportunities for investors to explore alternatives such as seller financing, as well as negotiate terms while maintaining a strong bargaining power
- Multifamily property can provide tax benefits: Investors can enjoy an array of tax benefits as they choose to invest in multifamily real estate. They can get the opportunity to capitalize on deductions related to mortgage interest, property taxes, and more.
- Inflation and recession favour investing in multifamily properties: Multifamily properties typically stay resilient during times of inflation or economic recession. There generally is a consistent demand for rental housing in the market, even in challenging economic environments. As a result, these properties can prove to be a valuable hedge against inflation, and an important potential safeguard during economic downturns.
As Kanat Sultanbekov mentions, multifamily properties are a relatively stable investment option, and hence can be ideal for investors with a low risk appetite. The ongoing demand for rental housing contributes to the increasing popularity of multifamily properties. Investing in it would help people to enjoy a reliable income stream and the potential for long-term capital growth. Multifamily homes are also relatively easy to finance, compound returns fast, and benefit from economies of scale.