There are many ways to go about investing in real estate to initiate passive income, but there are some pathways that prove to be more lucrative than others. We’re talking more specifically about multifamily investments on a large scale, that can give you a return that’s hard to find in other types of real estate investments (or, any investment, really).
The problem is, jumping into a new investment (especially in today’s market) might be a bit intimidating to some, especially given the current state of the economy, inflation, and more specifically, the state of the housing market.
But, the good news is that if you find the right multifamily asset — and, an investment group to help you with the process — you can create a recession-resistant portfolio.
So, even if another recession is on the horizon, your assets will not only be safe, but continue to be profitable.
Why is Multifamily Real Estate Recession Resistant?
People Will Always Need a Place to Live.
The workforce is always impacted in a recession, but regardless of how their wallets are looking, people will always need a place to call home.
You might be wondering, “Well, what if my tenants can’t pay their rent?” This is why it’s important to find the right tenants — or, those who need what’s called “workforce housing,” which is the type of housing that’s catered to people with stable jobs and incomes. This could be individuals who work in healthcare, factories, civil jobs, etc. They may not be ready to buy a house, not be able to afford one currently, or simply prefer to rent. Whatever the case may be, they are renting for now, and they are usually willing to pay a bit more on the first of each month in order to have a place that fits their needs, comfort level, and more importantly, their proximity to work and amenities.
Due to these factors, investing in a multifamily property with the right tenants means that you’ll always have consistent income, even if your vacancies take a hit during a recession and you’re not at full capacity.
Multifamily Investment Properties Can Be Diversified
Investing in multifamily real estate provides stability, balance, and consistency for your portfolio, since you’ll be earning cash-flow across multiple apartment units — even in just one multifamily property. This is, of course, a key factor in investing in something that’s recession-resistant. Even if some of your tenants might be impacted financially by a turn in the economy (unlikely given the fact your tenants will fit into that “workforce housing” category) you can still make out with a profit; and, perhaps even be in a position to help any tenants who might be struggling by being flexible on rents. This leads to lower turnover rates with tenants, keeping your investment strong, too.
But, before you even get to that step, investing in assets that can diversify your portfolio keeps your finances safe in an economic correction.. Multifamily properties are an excellent way to do this, especially spread across different geographic areas where there is opportunity in growing markets with properties that tend to be undervalued, as well off-market properties and redevelopment opportunities. (More on that, soon).
With the support of an investment group, you’re also able to act quickly on a deal when it’s discovered.
The Right Multifamily Asset Does Exist.
We already know that multifamily properties are ideal for those who want consistent cash flow and a solid return on their investment. We believe that a strong multifamily investment would be one that can have a cash-on-cash return rate between 7 and 12%, and an IRR of 14% to 18%. If that sounds unattainable, it may be so in some markets. But, that’s why it all depends on where and what you choose to invest in.
GSH Group focuses on finding the “right” multifamily properties, which all starts by concentrating in a region that is chock-full of them at good prices, especially compared to other markets. First and foremost, we focus on regions that are not overpriced or oversaturated with other investors and buyers, and also with no shortage of decent properties to invest in. This is why we often focus in regions like the midwest, which checks off all the boxes for being one of the best places to start and grow your recession-resistant portfolio.
And, sure — while investing in multifamily real estate can be risky to some extent, by looking to under-performing or situational opportunities (what we like to call “vintage” properties) that are often undervalued — and which we are typically able to get at a discount price — means that you don’t have to worry about taking any risks for your bottom line.
What is Concierge Multifamily Real Estate Investing?
Yes — investing in multifamily properties requires a lot of upfront investment and work. From finding the property, negotiating the deal, to doing any necessary renovations, finding tenants, and managing the property long-term — it’s much more than a full-time job.
Wouldn’t it be easier if someone could do the work for you while you enjoy the benefits of a strong, recession-resistant portfolio?
The good news is that there are ways to invest in multifamily properties that don’t require you to lift a finger, either. The GSH group provides a concierge service to invest your money in and across profitable multifamily assets in the midwest. This gives you an opportunity to reap all the benefits of investing in multifamily properties , without having to commit your time and energy to the cause.
If you’re looking to hear more about how to become a GSH investor, schedule a call with GSH’s investor relations team by clicking here.