Thinking of jumping into the world of multi-family real estate investing? While this type of investing can be lucrative and worthwhile, it’s important to be aware of the factors that can affect your investing portfolio. Before making any decisions, it’s important to familiarize yourself with the 5 biggest factors that affect multifamily real estate investing.

Demographics

Age, race, gender, median income, and population are all significant to your investment options. If you’re an investor depending on rental income, ask yourself, for example, if population is increasing or decreasing in the location where you want to invest. If it’s booming, there will be a greater demand for potential tenants and higher occupancy rates. That means higher rents which will result in a good return on your investment. If population is dwindling, that means rental properties may, in fact, sit vacant.

Economic Conditions

The overall health of the economy plays a significant role when it comes to multifamily investing. If a specific city or town is experiencing a surge in job growth, population will increase and the demand for rental properties will go up as more and more people move to where the jobs are located. Coincidentally, even if the economy takes a turn for the worse and unemployment rises, homeowners will be more likely to become renters as they look for more affordable housing. After all, everyone needs a place to live.

Supply and Demand

Don Wenner, CEO of DLP Capital Partners, comments, “When it comes to multi-family investing, Class A luxury properties are too expensive to build and to live in. More affordable Class B properties are not being built. Instead, they are sitting vacant and in need of repairs and renovations. By renovating, upgrading, and properly managing these types of properties, people who are looking for affordable housing in safe neighborhoods and near good job opportunities will create a higher demand in rental communities.”

Geographic Location

Pay attention to “where” you’re looking to invest or where the company you want to invest in owns rental properties. Climate plays a significant role. The Southeast part of the U.S. experiences a much larger population than other parts of the country. Warmer areas attract more people in addition to job growth as more companies relocate to warmer weather.

Interest Rates

When interest rates go up, home ownership goes down, affecting rental properties in a positive way. To learn more about how interest rates can affect real estate investing, join Don Wenner, CEO of DLP Capital Partners, for a live webinar on November 28th. You’ll get an in-depth look into the cause and effect relationship between interest rates and real estate investments, as well as a deeper look into how DLP has prepared itself for continual growth in any market condition.

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