Why Stock Investors Are Moving Into Multifamily Real Estate

What investors look forWhile it may be a scary time to be in the stock market these days, that doesn’t mean that all avenues of equity expansion have collapsed.  Commercial real estate in general and apartment, and multifamily investing in particular is a clear alternative to stocks. And like the market you can invest your 401K to try to increase your retirement.

Two stock market related articles caught my eye this morning.  One entitled: Investor Uncertainty At 6-Year High: Survey has details of a survey taken by the American Association of Individual Investors.  The percentage of stock market pros surveyed expecting the market to remain flat for the next 6-months is the highest that it has been in 6 years.  Ouch! Short term solutions to our domestic malaise and the European dept problems just don’t seem to exist. And this has the market on edge. No wonder more investors than ever are looking for alternative investment opportunities such as multifamily real estate.

Another article from Aaron Task of The Daily Ticker was even more dire than the first: “Very Scary”: The World Won’t End in 2012, But Might Feel Like It’s About ToFollow the link to the article and a video if you’re feeling cheery and want to change your mood.  Perhaps even scarier than the short-term fundamentals of the stock market is the overall lack of stability.

Daily changes in the Dow are much greater than they used to be.  On May 6th of 2010 the DJIA lost a $1,000,000,000,000 in a few minutes. 1,000 points. Starting at 2:45 PM the bottom fell out and within a few minutes a trillion dollars in value was gone.  Shortly thereafter the market went back up again and people seemed to forget about it almost immediately.  For thrill seekers that like stock markets and roller coasters:  Good luck to you!  I am counseling potential clients that multifamily real estate offers a more stable placement for equity that has never gone down a trillion dollars in value in a single hour.

Contrast the doom and gloom with the apartment market.  Over the past few years apartment construction both locally and national has come to a near standstill.  Rents are beginning to rise, vacancy rates are falling…I expect to see raising Net Operating Incomes and falling Cap Rates for the foreseeable future.  Portland has become a great market for institutional investors, and other ownership segments are following their lead.  Please contact me to discuss equity expansion at: 503.577.1034 or rick@rosecitycre.com.

Other articles you may like:

 

The Importance of Due Diligence in Multifamily Profits – Phase II – Books and Records | Rose City Commercial Real Estate

Demystifying multifamily cap rates, NOI, and investing basics | Rose City Commercial Real Estate

Multifamily real estate investment basics – part 1 of a series | Rose City Commercial Real Estate

Attractive cap rates attract investors to multifamily properties in Portland | Rose City Commercial Real Estate

Prospects for multifamily sector improve greatly | Rose City Commercial Real Estate

 

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