WHY APARTMENTS?
90% of all millionaires became so through owning real estate - Andrew Carnegie
Now, one thing I tell everyone is learn about real estate. Repeat after me: real estate provides the highest returns, the greatest values and the least risk - Armstrong Williams
Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world - Franklin D Roosevelt
Over the 25-year period from 1992 through 2017, multifamily real estate provided the highest average annual total returns (9.75%) of any commercial real estate sector with the second lowest level of volatility (7.75%), according to research cited in a 2018 report by CBRE, the world’s largest commercial real estate investment firm.
- Banks are providing more debt capital for apartments because they know that multifamily investments have a lower risk than any other real estate instrument.
- Apartments provide a steady income. The average five year cash flow of multifamily projects in the NCREIF Property Index is 8.58%.
- Rental demand remains strong. Regardless of the state of the economy, people will always need a roof over their heads. What's more is that momentum has shifted from home ownership to apartments. Downsizing baby boomers are losing interest in owning and many millenials have delayed or abandoned their home buying plans.
- Adding value to apartment buildings through capital improvements and property enhancements can have a nearly immediate payback because they command higher rents. Renters are willing to pay more if the improvements are for something that they value. The added benefit is that the cost of these improvements are tax deductible.
- Rents keep pace with inflation which is at an all time high. Year long lease terms position apartments to benefit from improving market conditions. When wages rise, rents can move higher as well, while commercial properties are locked into long term leases.
The numbers, statistics, history, and many other factors have proven real estate to be a successful and reliable way to grow your retirement funds, as well as have total control over every aspect of it.
Not only do real estate returns exceed those of the stock market, but they do so with lower risk and provide a steady cash flow.
