Multifamily Housing in 2016: The Right Time to Invest in Remodeling?
The growth of multifamily housing industry in the country has surpassed most other industries during the recovery period since 2008. This real estate segment is witnessing a high capital investment inflow from across the globe, which explains the increasing demand for companies offering premium nationwide remodeling services. In this post, we discuss some expert views on the future of multifamily housing industry in the US, and what makes 2016 a year of opportunities for owners and investors.
Joe B. Thornton Jr., Executive Managing Director and President of HFF Commercial Real Estate Capital Intermediaries at one of the conferences on the future of multifamily housing industry said, “Real estate is finally an accepted asset class”. He also projected that a large amount of money is going to come into this space from many investment channels. Among others, Chinese and Japanese investors have already begun to make their presence felt.
In the words of Bill Nan Zhou, managing partner for the Elite Investment Fund and the U.S. China Real Estate Investment Center, “It has become harder to invest in the core market in gateway cities, more opportunities, however, may exist in the secondary markets. Various smaller developers in China are pulling back due to market uncertainty and high land value. U.S. investments have, therefore, become more attractive.”
Trends in Multifamily Real Estate
Mary Ann King, President, Moran & Company and an expert in raising equity for multifamily deals, states, “Innovative technology has changed the way people seek and invest in multifamily real estate opportunities. Today is the era of digital marketing and 90 percent of the renters search for their apartments via mobile apps or other online sources.”
David Crowe, Chief Economist, National Association of Home Builders (NAHB) says, “The multifamily industry is strong and producing more number of housing units as compared to those produced in previous cycles”. The association forecasts the development of 361,000 housing units this year.
Statista, a leading online statistics portal, forecasts that the multifamily rent growth would amount to 4.6 percent in the fourth quarter of 2016 from 4.3 percent.
Richard M. Gollis, Co-founder, and Principal, The Concord Group, LLC Real Estate Advisers, says at one of the real estate conferences that the urban-core market trend focuses more on millennials with smaller apartments in utility-rich buildings. Millennials will grow to become boomers. A large number of baby boomers and older people can now be seen moving into apartments in LA. It is, therefore, that larger two-and-three-bedroom units are leasing for the price per square foot similar to that of the smaller units. There is a continued trend in rental over for-sale multifamily housing, and this could change drastically with more affordable housing.
Last Few Words
The upsurge in the demand of affordable housing options is one of the major reasons for the recent rapid growth in multifamily housing investments. Owners, however, need to realize that better returns on their rental property are achievable only when they add value to it.
Nationwide remodeling providers such as United Renovations have been instrumental in the significant growth of your business through their renovation and remodeling services that they offer within your allotted budget and timeline. The rise in your rentals, of course, makes up for the expenses you incur on the make-over of your property. You can call our consultants for a free service estimate.