Should You Invest in Multifamily Real Estate in 2020?

Real estate is a phenomenal way to diversify your investment portfolio, and while it isn’t necessarily the fastest way to wealth, it is certainly one of the safest. Whether you’ve been investing in real estate for decades or 2020 marks your first foray, multifamily properties are fantastic choices – especially in today’s housing market.

Why is Multifamily Housing So Popular?

In today’s economy, people are waiting longer to buy their first homes, and that means more people than ever choose to live in multifamily housing throughout much of their twenties. More people across America are renting now than in the last half-century due to everything from changes in the workforce to minimalist lifestyles. In major cities all across the country, very few apartments and condos are vacant, and in some cases, there are waiting lists dozens of names long waiting for their opportunity to move into a condo or apartment that suits their tastes and needs. For these reasons, there’s no better time to consider investing in multifamily real estate.

The Number One Reason to Invest in Multifamily Real Estate

If there’s one reason to pull the trigger on multifamily property properties, it’s the lack of risk. Because of the sheer demand for such housing across the nation, investors can feel confident that even though the risk remains low, property values will remain high. Whether you choose to purchase an existing apartment complex or you prefer to build your own from scratch, you’ll need to choose the right location, put together a team, and determine whether you want to hold the property or sell it.

Tips for Multifamily Property Investing

Being successful as a real estate investor requires some hard work, and when it comes to multifamily properties, this is doubly true. Fortunately, there are things you can do that will make things simpler and secure your profits.

  • Choose the right neighborhood. Location is everything when it comes to investing in real estate, and multifamily property is no different. When you choose a neighborhood, think about the type of tenants you want to attract, and ask yourself if that neighborhood offers attractions and features that appeal to that audience. Understanding the location can also help you make better choices about holding or selling the property later.

  • Put together a phenomenal team. Buying and flipping a house on your own is one thing; investing in apartments or another type of multifamily dwelling is something else entirely. Your team may consist of everyone from realtors who can help you figure out pricing and negotiate contracts for you, to lenders who can provide the funding you need to buy, and even to various contractors (think plumbers, electricians, and landscapers) who can ensure a job well done in terms of both aesthetics and quality. When your property is in the best possible condition, it’s much harder for the tenants you want to attract to say no.

  • Decide whether you want to hold the property or sell it. Finally, think about whether you really have the time or ability to hold rental properties. If your property is at maximum occupancy, can you handle the tenants? Are you prepared to put together a full-time maintenance and repair crew? Would you rather build the perfect community for those tenants and then sell? These are very personal questions, and while either solution can vastly improve your profit margin, you are the only one who can pinpoint your end goals and desires, then move forward.

Multifamily property investments are some of the most rewarding investments of them all. There are several reasons why these investments remain the most popular asset type for investors with high net worth, too: when planned carefully and meticulously executed, the potential for profit is virtually limitless.