Prior to 2010, most multifamily apartment communities were owned and managed by their original builders or small investors who counted in their portfolio fewer than 2,000 units on average. Over the ensuing decade, an influx of significant capital and private equity firms have reshaped the multifamily investing landscape.
While affordably priced housing will always be in demand, increased competition for existing properties and rising interest rates continue to drive sale prices higher and higher. The effect has been a concentration of ownership among several large-scale investment groups. Across the board, there’s been a diminished rate of return as rent revenues struggle to outpace a higher initial sale price, upkeep, and related expenses.
This might tempt owners to find ways to reduce costs, such as postponing improvement projects or raising rents beyond fair market value. This is counterproductive to successfully grow a multifamily investment over the long term. Tenants must come first.
Click here to read the full article of considerations at play by CEO & Managing Partner Gideon Pfeffer on Inc.com to learn more about the current multifamily housing market.
For a comprehensive list of Gideon’s articles published on Inc. Masters, click here.
