Economic Resilience Through Multi-Family Investments
Market forces and economic conditions play a large part in how investments perform. While that may be an incredibly obvious observation, a statement that may not be as obvious is that multi-family housing investments are quite resilient to forces that affect more traditional types of investment! A few of the factors that help multi-family investments remain so stable during turbulent times are:
Necessity and Flexibility
Rental housing remains in demand due to a shortage of single family inventory and because for many people owning simply isn't an option. Pair this with an increasing segment of the population that prefers renting over being tied to a 30-year mortgage (commonly cited reasons are flexibility as well as no time spent on maintenance and upkeep as a renter) and you've got a very robust marketplace!How Value is Determined
Single family property valuations are based on the opinions of third-party appraisers and the value of comparable properties on the market whereas a multifamily property's value is based on the income it generates. What this means for multi-family investors is that as the market fluctuates and other investments fluctuate with it, your investment in multi-family property will be less volatile based on the successful operation of the property itself which is determined by its NOI - net operating income!Stability During Turbulence
When markets are uncertain and fear is prevalent things like luxury spending, big purchases (homes, cars, etc...) and spending of disposable income all decrease which has far-reaching effects in many sectors. However, the need for housing remains essential and rent is near or at the top of people's priority list, rain or shine.
When deciding what investments to prioritize, make sure to strongly consider the stability of your financial vehicle.
