Economists who addressed the National Association of Industrial and Office Properties are bullish on an economic recovery taking place in the near future, but if you’re investing in multi-family real estate, don’t think that means it will be easy to increase your rent rolls. Here’s a snippet from the article:
On the multifamily market, however “all I have is bad things to say,” she said. A glut of new supply — and the fact that the number of construction permits for the first half of 2003 are up over the same time period in 2002— are major obstacles for the apartment market, according to Hudson-Wilson. “I talk to bankers and just tell them to ‘stop financing this stuff,’” she said. Another problem is that the largest demographic for apartment rental demand — 18- to 34-year-olds— is waning.
Of course, if interest rates stay where they’re at and lenders continue to offer 100 and 103 percent financing plans, why would 18 to 34 year olds rent when they can own?
Small multi-family properties should continue to be a good investment, though, as long as investors target the right tenant market.