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Whenever investors are looking at generating recurring passive income and increasing their monthly cash flow, multifamily real estate investments should be considered. However, with the impact of the pandemic and the subprime housing market crash still on everyone’s mind, some are asking: could 2022 be the beginning of another real estate crash?
First, we’ll start by saying that no, we do not have significant concerns about a real estate bubble in the United States at this time. While we will always refine our investment strategies as political and economic developments occur, we maintain an overall positive outlook for the economy and commercial real estate this year. However, we will likely continue to see financial market volatility as investors adjust to new interest rates, Russia continues their military action against Ukraine, and gas prices rapidly climb.
Compared to other real estate asset classes though, multifamily real estate investment has long been considered relatively ‘safe.’ This is largely because multifamily real estate investing relies on a balance between risk and reward. Looking at both secular and cyclical factors, both urban and suburban multifamily housing markets appear as though they will increase over 2021’s record breaking growth.
Unlike many other investments that were negatively impact or experienced an artificial suppression due to the pandemic, multifamily housing did relatively well, and experienced a quicker than average recovery. According to RealPage, occupancy lows during the pandemic were only 95.2% during June 2020, and they have since increased to 97.3% as of October 2021.
Since the fourth quarter of 2021, we have seen a complete recovery in the multifamily sector (source) with job creation helping to stimulate the need for additional multifamily units. Further, as renters move back to largely urban and metro areas to return to the office, we expect that rental housing demand will outpace the number of available units in many metros (source). This will likely create a positive situation for any investors who happen to be considering their multifamily real estate investment options.
And with more than $234 billion predicted in multifamily investment volume for 2022 in the United States, it’s no wonder that the multifamily investment market remains brisk (source).
The big question remains: will multifamily real estate investments remain strong if there is a housing bubble crash this year? We believe yes.
If you haven’t already considered whether multifamily real estate investing could be for you, now is the time. Just consider the top 3 benefits you would get from investing in multifamily real estate opportunities:
- Cash Flow & Passive Income Creation
- Scalability & Easier Financing
- Tax Benefits
To learn more about how you can begin investing in multifamily real estate, apply to join the Prime Investments Investor Club now.