5 Reasons Apartment Buildings Are a Great Investment

Investors are attracted to multifamily properties as interest rates rise and the price of homes go up, because it makes it more difficult for someone to purchase their own home.

Many investors believe that starting small is better than starting big. That’s understandable. It’s easy to grasp the idea of buying one unit per family. Is it the best way to spend your money and your time?

Although it may be more accessible, it doesn’t necessarily make it worthwhile. Could you take a moment to think about it?
Like any investment strategy, it is essential to understand the basics to succeed. Multifamily is common-sense investing. Let’s look at the many benefits of owning an apartment building.


1. The Market is Strong.
Multifamily is a survival mechanism that stays stable and does not experience the drastic changes that office and retail experience. Multifamily is one of the most risk-free real estate assets, and all demographic indicators indicate it will remain strong for many years.


2. Equity accumulation.
Multiple tenants can reduce your mortgage. You can build a substantial portfolio of assets for legacy planning with fewer properties and in a shorter time frame.


3. Leverage.
Leverage is simply purchasing debt so that you can acquire more properties, and can increase profits on your overall portfolio. There are many multifamily loan options available. The cost of capital is low. Lock down long-term debt and reduce principal.


4. Cash Flow.
Stock portfolios don’t create cash flow unless they pay dividends. Apartments typically provide cashflow and are more stable than paper assets like stocks.


5. Hard Asset.
Apartment buildings are not paper assets. They are real physical assets. You can kiss or kick them. The deal’s value typically doesn’t drop if you do the right thing. Apartments are an excellent inflation hedge. Inflation will eventually kick in and raise the value of apartments as we’ve seen recently.