Current economic conditions make multifamily real estate attractive to many investors. In the current environment, home buying is out of reach for many people or must be put off until later in life. This has led to an upswing in the rental market. If you’re considering investing in smaller apartment buildings, keep the following points in mind:
- Shiny and new may not be best: Recent trends have shown that renters find new properties attractive, but often don’t stay after their lease is up. This can leave you with empty units, plus constant cleanup and rehab expenses to prepare for new tenants. You’ll also incur marketing costs to attract the right new renters to your property.
- Average apartments are attractive among stable tenants: Well-maintained older rental properties can bring in a steady supply of “twenty-somethings” and working people while requiring minor upgrades and a few well-chosen building perks. These multifamily units may provide more reliable income, even through future economic changes.
- Bargains may exist in older complexes: This type of multifamily real estate can require a lower upfront investment and may even be undervalued. Larger investment groups may miss these good deals. Smaller or individual investors who consider these buildings can enjoy a high return on investment and property value increases. Of course, safety concerns on the rental property investment must be avoided or quickly remedied, and maintenance must be kept up.
- Proper property management brings success: Absentee owners without good communication with local management, or amateur owner/managers can lead to problems with your multifamily building. Good management goes further than keeping the property in good condition, it extends to offering a sense of community and stability with friendly, yet effective managers on the property.
With millennials and working-class families making apartment living popular, purchasing multifamily real estate continues to offer opportunity. If you need funding to make your multifamily investment plans a reality, contact the experts at Grecco Capital today.