Multifamily investment could be the best investment during a recession.
Multifamily investment in Q1 2022 hit an all-time high. Therefore, making the strongest first quarter on record and increasing 56% year-over-year to $63 billion, bringing the trailing four-quarter total to $374 billion.
Apartments have a long history of being a recession-resistant asset class that thrives in both good times and bad.
Multifamily Investment Could Be the Way to Go!
Forbes clarifies the difference between single and multifamily investing. For example, renting out multifamily may be more dependable and profitable than renting out a single family. Here are four reasons why this is true:
- Stability
- It is easier to build a portfolio.
- You do not have to be the property manager.
- It is more affordable than you think.
Multifamily Investment Cash Flow
Furthermore, we did some cross-referencing to get the facts. Much of what we found is the same four principles noted above. Investopedia also adds that multifamily is more expensive than a single family, of course, but is easier to finance.
First, multifamily consistently generates a strong cash flow every month. For instance, in a single family, you can lose your entire income on just one family moving out.
On the other hand, a ten-unit property with one vacancy would only be 10% unoccupied. As a result, the likelihood of foreclosure on an apartment building is not as high as on a single-family rental. All of this equates to a less risky investment for a lending institution and can result in a more competitive interest rate for the property owner.
Multifamily Investing is Not for Everyone
There are a lot of benefits to multifamily investing. But not everyone can do it. Depending on the number of units, the upfront costs could still be too high for some people.
Also, the competition is high, especially in a market with low inventory. Moreover, first-time buyers with more units may find hiring a property management company a must.
Multifamily Property Management Cost
Multifamily property management generally costs between 4%-12% of the monthly rent amount. That said, some multifamily property managers charge as little as 3% or as much as 15%. Multifamily is generally more expensive than single-family property management. This is due to the extra time and resources, it takes to manage multiple units and common areas like hallways, parking lots, and on-site amenities.
The Dias Team
Investors
Whether you are a first-time investor, or a seasoned investor looking to add to your portfolio, we know a great investment property when we see one. With several of us being investors, we’re aware of how to analyze the profitability of an investment and advise you on the highest return on investment possible. Let us put our knowledge and experience of the investment market to work for you today!
We leave you this link to multifamily homes for sale in Providence County. Happy Hunting!