Multifamily investing allows for the opportunity to benefit from:
• Cash Flow
• Tax Advantages
• Debt Paydown
• Economies of Scale
The multifamily sector is the most secure of the U.S. real estate market, which makes this class a favorite for banks to lend to. Historically Multifamily has outperformed almost all sectors of commercial real estate at a constant increase in value of approximately twice the rate of inflation. This has been made possible through strong risk adjusted returns, including attractive cash yields and low volatility couple with favorable debt.
Reliable Cash Flow Stream – Apartments provide reliable cash flow due to the number and diversity of tenants, and ability to change rents to maintain occupancy and revenue.
Inflation Hedge – Staggered, predictable rental expirations provide the opportunity to continually adjust rents to offset inflation and increase revenue based on market conditions and tenant demand.
Portfolio Diversification – Apartment investments provide portfolio diversification at a low relative risk level.
Highest Risk-Adjusted Returns – Apartment investments offer higher risk adjusted returns and appear to have lower volatility when compared to other property types.
Liquidity at Time of Exit – Apartments are traditionally a favored property type by both debt and equity investors and as such offer better liquidity potential at the time of sale when compared with other property types.
Institutional and private investors seek quality apartments through various economic cycles because of their consistent cash flow attributes and ease of debt financing (particularly through apartment lenders such as Fannie Mae and Freddie Mac.)