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Updated about 6 years ago, 10/24/2018

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What appreciation to expect for a MF property?

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How can we say that the appreciation I am getting on a MF property is good enough to sell the property? 

This is important to consider as part of the exit strategy. Can we determine something like appreciation factor of a neighborhood based on past and current price trends?

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Ryan Blake
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  • Lender
  • Texas
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Ryan Blake
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  • Texas
Replied

@Giridhara Gowdra chandranna

MF doesn't appreciate in the truest sense of the word. It is all based on the market cap. Market cap will fluctuate based on supply and demand primarily, then on condition, desirability, local economy, and other similar factors. Whether a neighborhood sees appreciation may or may not spill over to MF. It's all about how many people want to live in your property and how much they are willing to pay.

  • Ryan Blake
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    You can not predict the future. Multi investing is about income generating not appreciation.

    Make sure you maintain your property and keep your rents at full market rate and the rest is out of your hands. The biggest mistake new investors make is in maintaining there rent under market to attempt to hold tenants. This is a mistake as it is a misconception that it holds tenants, it is only lost income,  and it is devaluing their property resale.

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    @Ryan Blake & @Thomas S. thanks for the valuable inputs. 

    Also I was just foreseeing of a situation. Say I had done all my due diligence and bought a MF property in a neighborhood. After some time due to some reason the rents in the neighborhood goes low, vacancy rates are hitting high and also the property price has gone below the purchase price. So in these situations what should be the best exit strategy one should follow.