In the dynamic world of real estate investment, how does one decide between a single-family home and a multifamily property? While investing in single-family homes and renting them out remains a prevalent practice, multifamily properties are proving to offer better stability and profitability in 2023.
Here are four compelling reasons why multifamily real estate stands out as the investment of choice:
1. Increased Reliability
Given the ever-changing, unpredictable market, investors are searching for assets that deliver reliable income streams. Owning a single-family home that suddenly sees tenants unable to pay rent leaves you responsible for the mortgage, taxes, and other expenses. Contrast this with multifamily properties, where income flows continuously. Multifamily properties provide several rental units, offering the potential to generate substantial additional income. Moreover, holding a larger number of units allows an owner to decrease the financial impact of each vacancy, reducing overall risk. The dependable and continuous revenue streams — including consistent cash flow, property appreciation, mortgage reduction, and annual tax benefits — give multifamily investment lower levels of risk to the investor.
The pandemic has only emphasized this stability. Despite the economic turmoil brought on by COVID-19, demand for the basic need of shelter remained strong. This is because people need a place to live, regardless of the state of the economy.
2. Streamlined Portfolio Building
Consider the logistics: would you rather purchase 20 single-family homes or buy into multifamily real estate through syndication where you don’t have to go it alone? Pooling your resources with other investors and leveraging the expertise of professional managers is far simpler than juggling 20 different transactions involving distinct sellers, loans, and properties at various locations yourself. The ease of investing in a property with multiple units simplifies the process of scaling your investment.
3. Skip the Property Management Headaches
For landlords overseeing a handful of rental properties, hiring a property management company often proves cost-prohibitive. However, when it comes to apartment buildings, the dynamics change. Multifamily syndication investments offer passive investment avenues, enabling you to enjoy returns without the need for direct involvement in the property’s day-to-day management. When a toilet leaks or dishwasher breaks, you don’t need to give up your time to fix it! This can be especially appealing if you have limited experience or are short on time to oversee your single-family rental property. Additionally, you’re able to enter into out-of-state projects in areas with strong demand that can increase your profits.
Roers Companies operates our own property management company as part of our vertical-integration structure. By managing all key aspects of our business in-house, Roers Companies is able to acquire significant cost savings and efficiencies from beginning to end. This enables greater confidence in the operations and financial performance of each property.
4. Surprisingly Affordable
The notion of buying into an apartment building might initially seem cost-prohibitive. However, multifamily property investments through syndication allow individual investors access to larger, institutional-quality properties that would otherwise be hard to obtain. Roers Companies’ multifamily projects are owned collectively by a partnership of individuals, providing investment opportunities for those looking to invest as little as $100,000. This entry point makes multifamily investment accessible to those looking to enter the market.
As we monitor the economic outlook in 2023, multifamily properties emerge as a compelling investment option within the real estate landscape. Roers Companies is a leader in multifamily real estate investment, development, construction, and property management. We have a proven track record of success in developing and managing high-quality multifamily properties, and our team is committed to providing our investors with opportunities for stable investments with the potential for attractive returns.
If you are interested in learning more about multifamily investing, please contact us today. We would be happy to discuss your investment goals and how we can help you achieve them.