Real estate is often a market in which high-net worth individuals consider investing. It is by no means an easy venture, but wise investments can provide an opportunity for a solid foundation of wealth. Why is 2020 the year to invest in multifamily housing? The short answer: high-value, low-risk. Let’s dive in.
1. The American Dream is Shifting
The American lifestyle is changing. Now, more than ever, people are making flexibility, rather than commitment, a priority. We now see a larger market of “renters-by-choice.” A 2019 report by Housingwire showed 32% of respondents don’t consider buying a home part of the American dream and 20% don’t plan to buy a home at all. Millennials are facing challenges such as student loan debt and homeownership is an expensive undertaking of which they are not ready to commit. Renting is a flexible option that allows for job portability and convenience.
2. High Demand meets Favorable Lending Conditions
The increasing population of “renters-by-choice” ultimately increases the demand for multifamily properties. A strong economy combined with sound fiscal policy have led to favorable lending conditions when acquiring multifamily properties. Fannie Mae and Freddie Mac financial backing also offers investors a potential liquidity buffer that other types of commercial property investments do not have access to.
3. High-Value, Low-Risk
High occupancy and low vacancy rates provide solid opportunities for multifamily investments. The multifamily sector is gaining attention from investors looking for a high-value, low-risk opportunity. The growing demand and favorable lending opportunities makes 2020 the year to consider multifamily property investment.
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