Multi-Family Real Estate: Offering Stability in an uncertain market is Essential to your investment portfolio.

When it comes to investing, diversity is critical. The fluctuations of the market so far in 2016 can give you indigestion and also threaten your nest egg or retirement. With the volatile stock market threatening a bear market for the first time since the Great Recession of 2009 — due to decreasing oil prices, slowing growth in China and an election year — investors are wary as to where to put their money. With the stock market’s uncontrollable risks due to uncertainty in foreign economies, it is not surprising that investors are looking to a steady healthy market – United States real estate!

Multi-family real estate investments can stabilize your portfolio offering an appreciating asset, that provides monthly cash flow, and a steady increasing return on investment over the long haul. This strategy will mitigate exterior risks and offer more manageable investments. The location in an emerging market and adding value through increased rents, rehab, and professional management of multi-family properties reduces your exposure to the market’s volatile nature and other unforeseen risks inherent in other investments.

The multi-family market is further driven by Baby Boomers looking to downsize and Millenial’s paying off student loans, delaying home purchases and opting for the live-work-play environment city landscapes offer. This is a unique demographic perfect storm with today’s two largest demographics groups — some 1.59 billion people– looking to rent! Mix in blue collar and service industry workers who will be life long renters and the rental market is stronger than ever.

While residential real estate values are tied to comparable sales, commercial real estate values (5+ apartment units’ falls under the definition of commercial real estate) are directly related to the financial performance of the property. Even in a down economy, by identifying and acting upon value add opportunities, competent multi-family property managers can increase an asset’s Net Operating Income which, in hand, increases the value of the property. With the demographic shift pointing towards apartments, rents have skyrocketed in recent years and real estate professionals expect them to continue to climb. And as rental income increases, so does the property value.

While the performance of most investments rely on “the market”, every aspect of a commercial real estate investment can be analyzed before making the investment. Market research can be done to determine quality of location, both a financial and physical analysis can be done before purchasing an asset, and being a tangible asset, a proper management strategy can be implemented before the acquisition.