Residential rental properties have long been a haven for investors to buy, operate and secure solid returns. However, that was when we had a less volatile housing market. With the recent escalation of housing prices, but no corresponding increases in rental rates, properties that once cash flowed to a positive annual return no longer deliver positive returns to the investors.
Yes, your current properties have certainly escalated in price, but where will you invest your profits when the next rental property opportunity is not available.
An alternative can be moving up to small apartment buildings or small residential complexes. Residential investors collectively represent an enormous amount of equity, which, when brought together in groups of 3 to 8, can be used to secure smaller complexes, as your introduction to this new-for-you housing class.
Historically apartment investments have done extremely well. Even through the challenges of COVID most multi-family properties provided to be far more resilient than the experts predicted.
For some, apartment investments can be a much longer-term investment within their portfolios. They can create a diversification element for that investment pool that is your retirement.
It’s important to remember, however, this jump does not come without its challenges. The scope of property maintenance and tenant management multiples with each unit in the apartment or complex. There are things the investors need to learn in order to achieve the past levels of success they had with individual properties.
In the last while we have seen new and interesting combinations of financing and property management that are delivering well thought-out structured solutions to help investors step up into this next-step asset class. These multi part programs can provide everything a small collective of investors need to succeed in their initial years as multi-family property owners; from legal ownership structures, to funding, to tenant management.
If we can help you with you “Move Up” please let us know. Simply leave your contact information in the section below and we will back to you as quickly as possible.