Proven Demand, Basic Need
Some things work for a while and then quit. Some investments are on top for a while and then fail. Some technologies are big hits for a while and then fall out of favor as something better comes along. Remember the Polaroid Camera, cassette tapes, the horse and buggy, Toys R Us. What if you had invested in these? Each of them has gone away, gone bust.
Commercial Multifamily is not going away like these. It is an asset class that has staying power.
People will still need an apartment next year, 5 years from now, for long into the future. Why? Because shelter is a basic need. People need some form of shelter.
Families have two choices. They can buy. Or, they can rent.
Home ownership is a great thing, for those who can afford it or choose it. But, for centuries many people have decided to rent. Perhaps they don’t have the credit score or down payment or stability of employment. Some will prefer a single-family rental. Others will decide on an apartment in a larger complex.
Look at this chart from a recent Gallop Poll in which people continue to think Real Estate is their best long term investment, as compared with stocks and other asset classes.
We have extensive experience in both the single-family rental space and in the multi-family or apartment space. Both are good.
We find apartments or the Commercial Multifamily Asset to be the better. Multi-family wins with long-term return on investment and overall stability of the investment. We also appreciate the efficiencies of the larger multi-family properties we own. We cover return and relative safety in other articles. See Return of Investment, Steady Return , Low Volatility .
The multifamily space, as an asset class, has proven itself over time and promises to have a long life well into the future. Why? Because shelter is a basic, foundational necessity in life.
Those who study history, who understand the forces of supply and demand, who know the difference between basic needs and changing preferences see strength in the Commercial Multifamily sector for decades to come.
Unlike many other investments, Commercial Multifamily isn’t going away. It meets a basic need. It serves a steady, proven demand.