Investor · Las Vegas, NV · Member since 2020 · 153 posts · 136 votes
Brandon Turner posted this on his IG recently from the Multi-Family Investor Network Conference and I thought it was a fantastic hit list of why RE is still the top investment vehicle, even in a bear market. This was specifically meant for MF, but I think a majority of it still applies to smaller properties (1-4 units).
• Rents are increasing • Housing shortage • Low interest rates (Commercial interest rates are still low compared to residential interest rates, 1-2% lower in some areas) • Investors less trusting of Wall Street • Real Estate is proven (Unlike Crypto, which is still setting its foundation • Tenant-Landlord laws • Tax incentives
When people are consolidating, when people are playing defense – that's the time to get aggressive and make deals. Anyone have anything to add to the list?
None of us know what will happen with MF or with global economies but one certainty is that high housing prices coupled with high interest rates will help support the rental market in a nontrivial way. That does not mean there will certainty of high rents or that property values won't decline...just means that rent levels in growing locations have a huge risk mitigant through the cycle.
I personally do not believe the rent growth is sustainable - by that if you are underwriting at 3-5% increases over next five years in some markets I do not believe it will happen. I have zero data to substantiate this besides my gut and reports that cell phone payment delinquency is rising as well as car loans - which are typically the first two things people pay.
That’s what my crystal ball says today and I am wrong all the time. Just ask my wife.
None of us know what will happen with MF or with global economies but one certainty is that high housing prices coupled with high interest rates will help support the rental market in a nontrivial way. That does not mean there will certainty of high rents or that property values won't decline...just means that rent levels in growing locations have a huge risk mitigant through the cycle.
I don’t see wages going up. And I also think people working at home on a laptop is a scam that will not last. But I also see the government stepping in to protect all us investors from a crash. Could be wrong but that’s how I see it going down. If the market could operate unhindered we’d all be dead but I am putting my money on those days being over.