5 Reasons to Invest in Multifamily Real Estate in 2021
Real estate has always been a great way to grow your financial portfolio.
While the past year has been challenging for real estate investors, those who own multifamily properties have been able to better navigate the impact COVID-19 has had on the rental market.
Here are five reasons to invest in multifamily real estate in 2021.
The Multifamily Sector is Resilient
COVID-19 has had a heavy impact on many industries across the world. While the multifamily industry has changed, it has also shown great strength throughout the pandemic. For decades, even among economic uncertainty, the multifamily sector has proven to be resilient, showing the best performance when compared with all other major property sectors following the last two recessions. Any significant impacts from the pandemic are expected to be short-lived, which means your multifamily investment will prove to attract an even greater return in the near future.
Adaptable Common Spaces
The COVID-19 pandemic has resulted in many Canadians working from home. This has become such a normal practice that working from home is likely a trend that will be here to stay, even following the worst periods of the pandemic. Multifamily rental communities are ahead of the curve, being uniquely equipped to adjust common amenity spaces or even flex spaces in-suite to accommodate the sudden need for a substantial home office.
Low Mortgage Rates
In 2020, mortgage rates in Canada hit an all-time low, with interest rates as low as 0.99% expected to persist into 2023. This makes it an excellent time to invest in property, period, especially if you have the opportunity to invest in larger, multifamily properties.
Opportunity for Cash Flow Increases
When you increase your cash flow from investments, you open up more opportunities to reinvest and free up income for renovations and repairs. Multifamily properties are historically excellent for showing greater cash flow potential, as they yield better rent-to-price ratios than other property investment types.
Many Canadian cities have seen slumps in rental prices as supply increases and demand decreases in the wake of COVID-19. However, rentals with spacious or unique layouts, great views and upgrades are continuing to rent up at a significant rate, meaning that multifamily rental units are less impacted by the rental slump. If you're ready to invest in a rental property, choosing multifamily will secure more opportunities for leasing both in the short-term and long-term.