Finding the best investment type for your rental business can be tricky in today’s volatile market. However, investors have several options, whether they buy single-family homes, commercial buildings, or multifamily housing. If you’re considering any one of these investment types, you’ll need a general idea of how they’ll perform in the coming years. Today, we’ll focus on multifamily housing trends and whether or not this is a good investment type for 2024.
Contents of This Article:
- What Is Multifamily Housing?
- 5 Multifamily Housing Trends for 2024
- Is Multifamily Housing a Good Investment in 2024?
- Pros and Cons of Investing in Multifamily Housing
- Protect Your Investments With Property Management
What Is Multifamily Housing?
Multifamily housing refers to a type of property that can be divided into multiple separate units. Unlike a single-family home, which houses one person or family, multifamily buildings can be separated to house more than one person or family. In fact, depending on the building type, they can have hundreds of units. Some examples of multifamily homes include duplexes, condominiums, townhomes, and apartment buildings.
Many investors like multifamily properties because they can provide high returns–especially in today’s economy, where housing is always in demand. Whether you’re a Richmond property management company or you’re considering investing in real estate this year, read more to learn about multifamily housing trends for 2024.
5 Multifamily Housing Trends for 2024
Regardless of what investment type you’re interested in, it’s important to know what to expect in the years to come. Understanding multifamily housing trends can help you decide whether or not it’s the right fit for your portfolio. Here are a few things investors can expect to see in 2024.
- Tenant Expectations
- Eco-Friendly Preferences
- Lower Investment Risk
- Emphasis on Community
- Growth in Smaller Cities
Tenant Expectations
Tenants have several expectations for their living spaces in 2024. As technology advances, rental property owners must keep up with it and look for ways to incorporate it into their properties. For instance, renters these days are looking for more smart and connected features in their living areas. Whether it’s keyless entry systems or smart thermostats, owners, property managers, and tenants can benefit from these upgrades. After all, technology can be used to improve security and streamline operations.
Eco-Friendly Preferences
Another preference most renters have in 2024 is sustainable features. For instance, it’s time to start thinking about energy-efficient appliances, water-saving devices, recycling programs, or even solar energy. These features are starting to become less optional and more expected by tenants looking for sustainable rental housing.
Lower Investment Risk
Multifamily housing can be an excellent investment choice due to the low-risk factor. The housing shortage isn’t getting any better in 2024, meaning the demand for rental housing will be higher than ever. Investors will likely have no issue finding and keeping tenants, as fewer people are able to find affordable homes to buy.
Emphasis on Community
Renters these days are looking for more than a place to live–they’re seeking community. After all, who doesn’t want to feel connected and like they belong in their community? Because of this, developers are looking for ways to incorporate communal spaces in multifamily buildings. Whether it’s a fitness center, pool area, game room, or co-working space, these are all becoming more prevalent in new housing developments and are desired by renters.
Growth in Smaller Cities
In the past, multifamily housing was mostly confined to major metropolitan areas. However, it is now becoming more prevalent in smaller cities and suburbs. This is driven by factors like lower living costs and increased remote work opportunities. So, if you’re considering investing in multifamily housing, look for opportunities in smaller areas where more people seek alternatives to urban living.
Is Multifamily Housing a Good Investment in 2024?
If you’re thinking about investing in multifamily housing in 2024, you’ll want to do some market research to ensure it’ll be a wise decision. Looking at multifamily housing trends for 2024, it’s clear that the demand will remain strong, and risk will remain low. After all, with the current housing shortage crisis, there’s no doubt that there will be people looking for affordable housing.
That said, there are several reasons why multifamily real estate can be a good investment choice. For instance, you can earn passive income and expand your investment portfolio. So, if you have the funds and resources, buying a multifamily property may be an excellent investment choice in 2024.
Pros and Cons of Investing in Multifamily Housing
While multifamily housing may be an excellent investment choice for some investors, it’s not always perfect. Here are some of the pros and cons to consider when investing in multifamily properties.
Benefits of Multifamily Investments
- High Cash Flow- Multifamily properties provide more consistent cash flow and higher returns because you collect payments from multiple tenants each month.
- Tax Benefits- All real estate investments come with some tax benefits. Investors can write off several expenses, including mortgage interest, maintenance costs, depreciation, and other operating costs.
- Appreciation Potential- Multifamily properties can appreciate significantly over time, especially in desirable areas. Additionally, investors can increase appreciation through repairs or renovations.
Disadvantages of Multifamily Investments
- Higher Initial Cost- Buying a multifamily property is significantly more expensive than other investment types. As such, you’ll need a larger down payment and larger down payments.
- More Difficult to Manage- Managing several units and tenants can be too much work for one landlord to take on. As such, it often takes the help of a property management company, like Bay Property Management Group, to ensure things run smoothly.
- Some Market Risk- No investment is completely risk-free. For example, multifamily housing has more competition, and investors may experience some market volatility.
Protect Your Investments With Property Management
It’s important for investors to keep up with the ever-changing rental market–especially multifamily housing trends. With such a great demand for housing, investing in multifamily property can be an excellent opportunity for investors to expand their portfolios and increase cash flow. That said, it’s no surprise that managing this type of property can be too difficult for just one person.
Need More Advice? contact us today!
That’s why Bay Property Management Group is here to help! Our team of experienced property managers can ensure your properties and tenants are cared for 24/7. Contact BMG today to learn more about our comprehensive rental management services throughout Baltimore, Philadelphia, Northern Virginia, and Washington, DC.
