In my years of investing, I’ve found multi-family properties to be the most attractive and profitable investments, which is why I’ve specialized in these types of properties at Founders Grove. I consider the three main advantages of multi-family properties to be better returns, increased stability, and enhanced portfolio diversity.
After adjusting for risk, multi-family properties consistently generate the highest returns, outperforming every other property type even during major economic downturns. The National Council of Real Estate Investment Fiduciaries has found that multi-family properties’ appreciation has grown 10-fold since 1983.
While other properties may fluctuate in value and profitability, multi-family properties maintain their value, thanks to consistent demand, predictable cash flows, and robust liquidity. The near-yearly turnover of leases also enables cash flows and rents to respond quickly to inflation and demand, keeping returns consistent.
Because apartment returns are largely uncorrelated to stocks and bonds, investing in a multi-family property can help you diversify your portfolio without compromising stability. When traditional investment markets become volatile, having real estate investments is a good way to ensure ongoing profitability and growth.
As you explore potential investment areas, keep these benefits in mind. Other property types can be more volatile or include multi-year leases with only one tenant, which limits your ability to improve returns. If you have any questions on investing in multi-family properties, contact us today.