In the current environment, investors have placed a heavy focus on de-risking their portfolios to position themselves to more effectively “weather the storm.”
One of the asset classes that has historically performed well, and often outperformed other asset classes, during inflationary and/or recessionary times is multifamily real estate.
Here are some of the key takeaways from a recent Forbes article (click link above to be taken to article) highlighting some of the benefits of investing in multifamily apartments during a recession;
- Stability: While many asset classes are more volatile than they have been in recent years, multifamily provides a solution to that problem. With large-scale multifamily properties, you benefit from a diversified tenant base. If one tenant is having issues paying their rent due to economic hardships, you still have all of the other occupied units in the property who are paying. This benefit is also strengthened by the property management team who will screen tenants to ensure they have sufficient income to cover rent (typically 3x monthly rent payments) which will minimize the risk of tenant defaults.
- Scalability: Building a portfolio of multifamily investments is not only easier than you think, it is also extremely beneficial for de-risking your real estate (and overall investment) portfolio, which already has one of the best risk factors relative to other investment vehicles available. Scaling your portfolio comes down to finding deals and operators that you believe in and trust. Once you find both of those ingredients, true synergy can take place and you can scale your investment portfolio quicker than you may have ever anticipated.
- Static involvement: When you invest in multifamily properties, the sponsors (or operators) will be the ones overseeing the acquisition, renovations, management and disposition of the respective properties. This means that once you are invested, you get to sit back, relax and collect your returns.
Building your real estate portfolio is a powerful tool for generating long term wealth, and you can tap into it today!
As always, we hope this is insightful. If you’re interested in learning how to invest or discussing some of our current investment opportunities, don’t hesitate to reach out! Sign up for the newsletter below if you wish to have these sent directly to your email so you don’t miss a thing!
Kevin & Mitch