Why 2022 Still Offers Excellent Opportunities For Multifamily Investments?

Dana on January 4, 2022



2021 has been one of the most successful years for real estate investors in multifamily housing. Many investors are asking themselves if 2022 can repeat the success.


With the current market conditions and demographic shifts, multifamily housing has become the strongest leg in real estate for investors seeking stable and attractive returns.


After an impressive run in the second half of 2020 and 2021, we still see attractive opportunities for real estate investors in 2022.


Here is why!


Low interest rates environment and tremendous amount of liquidity


With interest rates at record low, and tremendous amount of liquidity available to investors, it is very difficult to find an asset class that offers the stability, financial perspective and attractive returns of multifamily housing.


This trend has attracted an enormous investor attention and will likely continue to be an attractive source of future investment returns.


Strongest leg in real estate


With the current market conditions and demographic shifts, multifamily housing has become the strongest leg in real estate for investors seeking stable and attractive returns.


This trend is so popular, that at the moment we are witnessing investors who are converting hotels into multifamily housing properties.


While all types of commercial real estate stand to gain from an extended stretch of low interest rates, multifamily housing has one major advantage from the lenders` point of view that is rental income comes from a diversified pool of tenants, that make investments in multifamily housing a better proposition. Office or retail properties are built around a few anchor tenants, which are not always easy or cost-effective to replace.


Inflation hedge


The US inflation rate in 2021 rose to 6.8 % according to the Bureau of Labor Statistics that marked its highest point since 1982.


Historically, real estate has been one of the top investor choices as a hedge against inflation. Investors might take defensive measures and protect themselves from the effects of future potential high inflation through smart strategic investments in multifamily properties that will offset the rising inflation pressure.


Excellent investment returns


Multifamily housing is a very popular option among baby boomers that downsize and millennials that like the flexibility that comes with renting. With growing number of remote working opportunities secondary and tertiary markets are gaining popularity.


Demand is also strong for Class B and Class C multifamily housing. Investors can find attractive opportunities for value-add renovations that will justify higher rents. Reinvesting in a property through improvements and property enhancements might have a nearly immediate payback.


Renters are generally willing to pay more if the improvements are of something that they value and receive a benefit from using daily.


Investors that will make smart investments in multifamily housing properties that are positioned according to the needs of these target groups and offer amenities that best match their lifestyle will be at the forefront to benefit from this trend through attractive organic cash flow and property appreciation.


Rising demand for multifamily housing


The real estate market proved its strength in 2020 and 2021.


Multifamily housing developers have given families fewer reasons to consider a condo purchase. The quality of apartment living has risen, and smart investors are renovating their properties to include better amenities, more entertainment and green space to better match the lifestyle and preferences of existing and future tenants.


Downsizing baby boomers are not showing major interest in owning, many millennials decide to delay or abandon their home buying plans, and Generation Z is entering the housing market with rentals first preference.


Considering the market trends, growing number of job opportunities for work from home and shifting customer preferences, it does not come to a surprise that the demand for multifamily housing is outperforming and will likely continue to do so in 2022.


Ready to start your next investment project?


Please contact us to learn how we can best help you to turn your next investment project into a success.

Email: [email protected]

Telephone: (954) 570-0300

Address: 850 SE 7th Street, Deerfield Beach FL 33441


About Adivo Construction


We are a national general contractor with over 50 years of combined construction expertise specializing in the value-add improvements of apartment communities.

Our mission is to assist our clients in finding the right balance between capital expenditure and appreciation potential by designing and executing customized renovation programs that are focused on increasing cash flow return and overall return on investment.

We have completed over 100 repositioning projects for publicly traded and privately held domestic and foreign companies in states such as Florida, Texas, Kentucky, Oklahoma, Georgia, South Carolina, Utah, North Carolina, Tennessee, Indiana, Michigan, Missouri, Arkansas, Ohio, Arizona, Nebraska, and Kansas.


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