Although the existing crisis continues across the nation and across the globe, the local real estate market continues to show an upswing when it comes to certain property investments. Indeed, the low interest rates in the market are proving to be an opportunity to capitalize on as many real estate investors are finding.
Among the real estate opportunities that continues to grow are multifamily properties which are seeing somewhat of an upsurge. Operators have also found that multifamily properties allow them to gain a bigger foothold in the market and this is especially so if they have a larger and more extensive area footprint.
Unfortunately, what operators need to be wary of is the time they are taking to invest in such properties. Given the low interest rates, the acquisition process is said to potentially create an environment of high competition. To add to the interest rate, the speed at which these properties are becoming available is far slower than the capability to create the supply. This means that with the progress of time, the acquisitions will become much more competitive and those looking to invest will find themselves in a long line of other investors.
Investors are currently comprised of individuals with a high net-worth but also pension funds and hedge funds looking to capitalize on what is a proven market. This is due in part to the fact that these individuals and institutions understand the value of these multifamily properties. It is also worthwhile to note that the return on these properties can be quite lucrative, most especially if the property is high performing.
One other option investor has, is to increase the value of their assets is through the labeling of value adds. The labeling of a value add can be beneficial for investors when it comes to increasing value not just to make an already attractive property more attractive, but also to make an older or more difficulty to maintain property, more attractive than its core asset.
Affordable investments may not always be available in the marketplace, but opportunities do exist to still make lucrative deals. The challenge with affordable investments is often hidden in the legal paperwork and multiple potential issues in the financing space. This is part of the reason why it can take a much longer time to close these affordable housing deals. Again though, there are the diamonds in the rough and no matter the complexities in the close, there will be those worth the time and effort.
Essentially, the multifamily property investments can come in various shapes and sizes, with some lucrative deals ready to be made. While the market continues the path of low interest and high value properties, this may not last so long. Especially given the current crisis and the few areas of uncertainty, it is worthwhile to grab the opportunity while the competition to invest is moving upwards to its peak. Ultimately those willing to capitalize on this risk will be see the higher return or reward on their investment.
