Five Reasons Why Multifamily Real Estate Is The Best Place To Invest Right Now
With interest rates rising and the capital markets in turmoil, people’s fear is at an all time high! Let me assure you that apartments are still THE BEST place to put your money!
Five Reasons Why Apartments Are The Best Place To Invest Right Now
- Hard assets like real estate are the best hedge against inflation, and apartments are arguably one of the best positioned real estate asset classes to create wealth in an inflationary environment. Why? Because the short-term leases allow apartment owners to pass along higher expenses to the tenant base through rent escalation. Apartment rent growth is outpacing inflation by a wide margin and is well positioned to do so for years to come, which will drive up returns.
- Demographic trends are favorable for multifamily housing, particularly in regions experiencing net migration. Dallas is growing like crazy and just moved up 5 spots in US News’ List of Best Places to Live in 2022. The Dallas market is experiencing double-digit rent growth. It doesn’t matter if interest rates and cap rates rise, as long as they are outpaced by rent growth.
- Most of the underlying economic conditions that favor apartment investing remain solid. Employment is arguably the best economic indicator for forecasting the health of the multifamily market. There have been more than 20,000 jobs created in the Dallas market. Doing business in Texas costs less and many employers have moved here…bringing employees who need housing. Luckily, we are in the housing business and can provide affordable apartments. 😁
- The debt terms for multifamily remain extremely attractive. Even with the recent rise in interest rates (and further increases likely on the horizon) the cost of capital for multifamily housing remains near historically low levels.
- Multifamily real estate has proven to be recession resistant and offers superior risk-adjusted returns. In contrast, investments like stocks and cryptocurrency are subject to the whims of the market and have never felt more speculative and volatile. Real estate is boring by comparison, but may allow you to sleep better and build more wealth in the long run.
Even in a crisis, real estate remains a solid investment.
Put your cash to work in apartments—the best place to invest right now.