If you’re thinking about investing in real estate, take a good look at acquiring multifamily assets. The unique economic trends, potential revenue streams and tax incentives alone make them an attractive long-term investment.
Multifamily real estate is advantageously poised in the US economy. Here’s why.
Baby boomers and millennials combine forces
Money follows the trends of the generations. Baby boomers and millennials are a powerful duel force in the economy. Both generations are focused on apartment living. This unique situation puts a premium on multifamily properties.
Economic trends show that many millennials aren’t buying homes. Instead, they’re opting to put their money into apartment living. They want the option of freedom and travel. Baby boomers are downsizing their singe-family homes to move into smaller apartments for the freedom and savings.
Both generations are trending towards multifamily properties. And where the trends are, the money flows.
Positive cash flow from investing in real estate
If you own a single-family property you have limited options for creating positive cash flow from your investment. Multifamily properties offer multiple ways to create positive cash flow beyond basic rent.
Multifamily property owners often charge for extra amenities such as:
- laundry facilities;
- party rooms;
- shared workspace;
- bike lockers;
- fitness centers;
- pet services; and my favorite,
Each new service adds an additional source of revenue. Not only that, these services and amenities will attract new residents to your property. There are many ways to create additional revenue based on your location and market.
Providing safe, clean housing for residents is a wonderful service. Of course, not everyone is willing to do it. The risk you take also has it’s rewards. There are many tax strategies and incentives for those who own or own a part of multifamily real estate. Laws vary depending on if you are owner-occupied but the principal is the same.
When investing always consider: mortgage interest; property taxes; operating and capital expenses; and depreciation when planning your tax strategies. A tax professional who is fluent and savvy in real estate investments will help you maximize your tax savings and protect your revenue stream from the unexpected.
Multifamily in your portfolio
Real estate investment has a wide field. There are endless angles to play when investing in real estate. Multifamily real estate should be a consideration because of economic timing, cash flow and tax incentives.
You will find that the right apartment properties are powerful investment vehicles.
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