How to Mitigate Risk in Multifamily Investment

Posted on April 20, 2020

A winning chess board symbolizing the mitigation of multifamily investment risk

The very nature of the word “investment” implies risk.

Risk can cause potential investors to invest less or not at all – which is a loss for not just those receiving the investment but denies the potential investor the profits that could be.

That’s why at CGI Strategies, we encourage our investors to arm themselves with the best resource of all – knowledge.

When considering a multifamily investment, the usual suspects, of course, should all be considered:

  • Market risk
  • Interest rates
  • Potential deterioration of the property

But the biggest consideration of all by a potential investor should be the regulatory laws that govern any investment.

You need to do your research.  City and state ordinances are regulations change monthly and greatly impact the multifamily investment scene.  Keeping on top of these changes and taking some key steps will greatly diminish your investment risk.

We recommend keeping a diverse portfolio, especially when it comes to location.  Not putting all of your capital into one area allows you the flexibility to pivot as regulations appear.

Make sure that you’re involved in the communities where your investment lies.  This will keep you ahead of any potential changes that may happen and give you time to adjust.

By adopting these simple strategies, your multifamily investments will be your most profitable.

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