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What to look for as a multifamily investor?

Why Multifamily? People often ask us, “What are the advantages of being a multifamily investor?” The answer is simple: by bringing rents up to market value and making some small improvements, you can build up a significant amount of equity in multifamily buildings. What to look for as a multifamily investor? Here at Abel Real Estate Investments we always consider the following. Location, Location, Location (Of Course)! The cost of homeownership is very steep now, so many people prefer to rent. The multifamily investor should consider locations where economic factors (e.g. land constraint) are pushing up rents. At the same time, the investor should always consider areas where there is substantially high job growth, so that the occupants will be in a position to afford high rents. Finally, the location must provide an attractive atmosphere to live, work and play. A Key Social Demographic One social demographic that we believe especially deserving of your attention: Gen Y, With a population, all still under 30, estimated at roughly 72 million strong, they are the most educated, diverse, tech-proficient, and soon-to-be largest American generation, and, because of the state of the economy and their distinctive culture, are most attracted to the idea of multifamily living. Gen Y and Life in the City For one thing, many members of Gen Y are experiencing weak job security and the likelihood of having to change jobs, so they are reluctant to be burdened with a 30-year mortgage. Furthermore, people of the Gen Y generation tend to think less about buying the “American Dream” and more about experiencing it. For them, this means the advantages of urban life: proximity to friends, to trendy restaurants and cafes, to all the amenities of city life. Utilizing apps and social media enable Gen Y to maximize their living experience in the city. The startup mindset is yet another factor luring them to the city. And about the high rents: “there is an app for that.” Gen Y is dedicated to getting more with less – they can do without cars, relying on ride-sharing apps like Uber and Lyft, and are savvy consumers, relying on word-of-mouth or “buzz” advertising. If you own or represent...

Why Real Estate Investments?

Real Estate a Tangible Asset, a Hedge against Inflation Real Estate Investment property is a real asset, like precious metals and oil. It is tangible and physical, deriving its value from properties and substance, unlike the case of financial assets, whose value is backed by underlying real or intangible assets. This means that a real estate investment can offer you an invaluable hedge against inflation, so it should be reassuring to you to know that real estate has its place in your diversified portfolio. However, you should also be aware that real estate, like other real assets, has its drawbacks: its transactions, carrying and property management costs are higher; its liquidity is lower. Below are some of the ways that you can profit from real estate investments. Some Options Investing in real estate – whether residential (e.g. houses, apartments) – commercial (e.g. office, shopping space) – or industrial (e.g. manufacturing facilities) – has a number of obvious benefits. Considerable gains can be obtained from the future resale or rental (or both) of an investment property. How fast you want to turn a profit is important in determining your investment scenario. If you are thinking in the long-term, an apartment building might be the right vehicle. You can profit from capital gains via the appreciation of your investment property over time, as well as possible increasing rental income. If you have an eye on a quick profit, however, you might consider the common practice of flipping the property – buying it and selling it after fixing it up. In any event, whether or not you are contemplating the eventual resale of your investment property, you can just sit back and enjoy the receipt of rental income from the apartment, house, or office/shopping space you own. Skilled Property Management Essential to Profitability Finally, bear in mind that whether you decide to invest in a residential, commercial, or industrial property, solid, conscientious property management is critical if you want to both maintain the value of the property over the long-term while continuing to generate on-going rental income. Make it a priority to hire an experienced, real estate-savvy person or team, well prepared to handle all the duties...