Providing homes and revenue.
Multifamily homes. Our home.
“Which is the better real estate investment: a single family home or a multifamily property?” many investors are wondering frequently.
Investing in a single-family home – buying it and renting it out – is a common practice. It is a straightforward concept and easy to execute. But in many cases, investing in a multifamily property will be more reliable and profitable.
One simple answer which investment to choose is not “Location, location, location” but stability, stability, stability.
Let us explain why we made “multifamily” our preferred investment class and a unchangeable principle in Whitestone Capital’s investment philosophy.
IT STARTS WITH THE RIGHT GOAL
We believe in the robust multifamily asset class. Multifamily has the lowest risk out of any other CRE (office, commercial and retail) investments as it houses many tenants, thus spreading the risk of defaulting payments on dozens, if not a few hundred parties.
Even more important than cash flow is increasing the market value in order to realize the bigger part of our return by disposing of an investment at a considerably higher value.
Aside from market trends, we are raising a property’s value by optimizing the management, improving the premises and the application an appropriate marketing strategy.
While there are fewer barriers to entry when building a portfolio, there are several advantages to investing in large residential complexes.
Buying a home requires equity, credit and job security, features that are not always a given.
Additionally, renting gives more flexibility and financial stability to many Americans. Since the average mortgage in the US is around $1,609 it becomes obvious why every third American will be renting instead of buying.
Lastly, younger people below the age of 40 are for more likey to rent a home instead of buying their own apartment or even a house. This applies even more to cities where real estate is typically more expensive.
The renting market has always been attractive for investors and shall remain in the future.
Multifamily property is considered a relatively “safe” investment compared to other real estate asset classes.
History shows that multifamily real estate holds strong through economic uncertainty. In past recessions, multifamily outperformed all other forms of real estate. Rent recovery after the recession was also faster.
Even during a a possible economic downturn, rent is one of the few spendings that cannot be done without.
During a recession, many Americans find themselves forced to sell their homes and move into rental housing instead.
After a recession, it usually takes a certain time period to rebuild their credit, which creates prolonged demand for multifamily property.
An investment in multifamily properties is a safe investment in all economic climates.
Fluctuation of tenants is very helpful when trying to yield the optimal returns. Instead negotiating with one powerful party occupying thousands of square feet, we are dealing with families.
Multifamily property will always appreciate in value, especially in areas which profit from a steady influx of new inhabitants.
With rents constantly rising in and around Florida, well-maintained and flawlessly managed properties will increase in value steadily.
One big benefit of investing in multifamily real estate is the expectation of a reliable monthly cash flow from rental income.
Multifamily properties have multiple tenants paying rent. If there’s a vacancy in one unit, it is rather an opportunity to rent it out at a higher rate.
Investing in multifamily real estate is a fast way to grow for Whitestone Capital and its investors. The leverage of larger projects (or investments) enables us to act quicker and more effective.
Logically, it brings many advantages to operate in one location or project. Whether its refurbishment, maintenance or management. It is massively effective to have staff being responsible for one single project.
Multi-family real estate consistently generates a strong cash flow every month. This remains the case even if a property has a handful of vacancies or a couple of tenants who are late with their rent payments.
This equates to a less risky investment for a lending institution and results in a more competitive interest rate for the property owner.
"As we continue to emerge from the pandemic and anxiously wait to see how the economy will shake out, it’s a good time for investors seeking security and scalability to look into multifamily real estate investments."
"There are many advantages to owning multi-family real estate. These include access to easier and better financing opportunities, the ability to quickly grow one's rental property portfolio, and the luxury of hiring a property manager. "
"Historic demand across multiple generations, an anemic supply of new housing, demographic and lifestyle trends that favor renting, and economic advantages for investors and renters will provide tailwinds to the multifamily market."
The right place. the right time.
We started out Whitestone Capital in Florida – not as a coincidence.
Just as we are trusting the multifamily market, we are aware that the Sun Belt, especially Florida is the best place in the US to invest in real estate.