Why Multifamily Communities are the Smart Real Estate Investment Today

Investing in multifamily communities -developments that consist of apartments, townhouses, or detached homes which house multiple families within the community – is perhaps today’s smartest opportunity to profitably diversify your portfolio with real estate.

 

Other options are fraught with peril and headaches. Indeed, when it comes to investing in real estate, the best way:

Is not buying and renting single family homes and other income properties. Rising home prices can make it difficult to generate positive cash flow from income properties in many areas of the country. And in many states, housing laws favor tenants, which can turn the landlord essentially into building supers or handymen.

Is not renovating and flipping homes, which is a lot of risk and a lot of work. You need a lot of cash to buy and fix houses to make them desirable rental properties. Contractors charge a small fortune and often don’t complete work on schedule.

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Investing in multifamily rental communities sidesteps these problems, giving you:

  • High occupancy rates.
  • Long-term, stable tenants.
  • Higher monthly rentals.
  • Little or no work for you as an owner.
  • Greater cash flow.
  • And significant capital appreciation

In 2014, rental rates for multifamily houses increased by 6% in just one year. {1}

Some sources say that the highest return on investment comes from commercial real estate: CNBC reports that today the returns from commercial real estate are beating the stock market. {2}

But a study from the National Council of Real Estate Fiduciaries reports that for 4 of the past 5 years, investing in multifamily housing has outperformed office buildings by up to 600 basis points. {3}

And a report from Lloyd Jones Capital notes that multi-family properties have the highest dividend payout ratio and that direct investing through a partnership is the optimal way to invest in multifamily communities -far less risky and costly than outright purchase of a multifamily apartment building. {4}

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According to Multi-Housing News Online, millennials are in large part fueling rental demand, because despite higher wages, they do not have the wealth needed to purchase their own homes – making them likely to stay in rental housing for longer periods than the Baby Boomers before them. {5}

Both millennials and other tenants want modem, attractive housing in good neighborhoods with plenty of amenities, spacious layouts, and the highest quality construction.

And multifamily community developments offer these renters precisely the modern design and luxurious living they desire — much more so than traditional apartment buildings or rentals in two-family houses. {6}

To find out how you can profit from the new boom in multifamily community rental properties, with a self-directed IRA, click here now.

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