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Welcome to the AAOA Forum, where we discuss the the topics our members want to hear and want to talk about. We like to take an active roll in the online community to help our members learn and help educate landlords new and old. We encourage you to participate and join in our discussions. Thanks.
7 Key Reasons to Invest in Apartments
Torto Wheaton Research completed a research report, entitled “A Case for Investing in U.S. Apartments” which was published last week by the National Multi Housing Council.
The group identified 7 Key Factors in Apartment Investing:
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Apartments have a long track record of having the highest risk-adjusted investment returns compared to other property types. The sector has proven to be most resilient during economic downturns, delivering superior returns during recessionary periods.
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Apartments have the most efficient cash distribution, due to low capital expenditures and technical improvements.
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Apartments have a lower cost of capital and wider availability of debt capital; apartment investments can support more debt with the same level of risk.
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Apartments operate in a favorable, transparent, and market-driven regulatory and taxation environment. In addition, apartments have shorter leases than other property types, allowing them to adjust more quickly to changing market environments.
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Apartment properties vary widely in terms of age, size, quality, and location, creating a broad spectrum of opportunities and possible investment strategies, thereby providing greater liquidity than other sectors.
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Short-term problems from the current economic downturn aside, apartment market fundamentals are expected to remain positive on a cumulative basis over the next five-to-seven year period. Demand is expected to expand and new supply is expected to subside, creating conditions for moderate rent and revenue growth in most locations.
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Apartments are still under-weighted in institutional real estate portfolios.
For more on the Council’s report, see NMHC Research.
See The Top 5 Apartment Owners, Managers in the Country.
Let us know what you think by commenting below. For questions about our blog, contact our editor at kim@joinaaoa.org.
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[...] type, by financing structure type, and by the location of the originating office. See our feature, 7 Key Reasons to Invest in Apartments. Share your insights by commenting below. For questions about our blog, contact our editor at [...]