WHY MULTI-FAMILY INVESTMENTS ?
Apartment communities present numerous large benefits to investors, which is why we believe multi- family investing is one of the best investment strategies ever known. Real estate has historically been one of the most lucrative options for investors, with multi-family investing achieving some of the highest returns in the real estate investing domain. Multi-family properties have several significant advantages over single family housing, including easier management, higher cash flow, multiple tenants to offset vacancies, and higher tax breaks. For the past few years, several trends have led to an even greater demand in multi-family housing:
Americans are looking to rent in apartment communities more than ever
before. There are more than 70 million Baby Boomers across the US. As the Baby Boomers continue to age and begin to sell their homes, they’ll want to downsize to amenity rich multi-
family properties. The Millennial generation (the largest demographic in the US) is continuing their endeavor to find their own place to live, but place an emphasis on experiences and community. Research has shown that this generation would prefer to live in smaller, less expensive multi-family units and spend their money on experiences rather than owning a home.
More and more Millennials will continue to look for community-centered multi-family properties to call home.
Demand for renovated apartments is growing. There’s been considerable new construction in cities where the job market has shown growth like Portland, Seattle, and Denver.
The number of new multi-family units in these areas have caused a softening in the class A market for the first time in years and the demand for new properties is peaking. As a result, more class B properties are needed, but building new class B properties presents a high risk for the potential return which is causing developers to refrain from entering this market. This means that the demand for older class B properties that were built in the 70’s, 80’s and even the 90’s which have been recently renovated will be in high demand.
Renters want to see more multi-family properties in the suburbs. As people are forced out of the larger cities due to rising housing costs, suburban markets are becoming more
and more attractive. People leaving the city want a lower cost of living, but still desire the sense of community and neighborhood with amenities that they had in the larger city. They want to live in areas that draw people together, but most suburban cities have never thought of or planned for this. If suburbs want to grow and attract this group of people, they will need to increase their multi-family housing. Investing in older class B or class C properties is an investment into the community and an opportunity to transform under-performing properties into the amenity rich, community centered properties that people are looking for.
Ascendant Investments does not rely solely on the momentum of a market, however. We also employ “value plays” and “forced appreciation” techniques to maximize returns. We understand what makes commercial property value increase. Multi-family properties’ value relies almost exclusively on the net operating income (NOI) they produce. That presents an opportunity for skillful and knowledgeable managers such as our company to increase the value through affecting the NOI. We upsurge the NOI through adding new sources of income, upgrading tenant quality, improving tenant amenities, fairly increasing rents, and decreasing operating expenses. The boosted NOI drives value upward and “forces appreciation” to the benefit of our investors. This is reflected in both yearly returns and equity growth.