Today Federal Interest rates were increased by a quarter-point for the 9th time this year- amidst banking turmoil.
This raises questions about whether these monetary policy changes will impact real estate investments during these dynamic economic times.
Multifamily Investments in 2023
Here’s why multifamily remains resilient:
Multifamily real estate is one of the safest investment options regardless of the economic climate.
Several factors contribute to this phenomenon:
- Housing is a basic need, yet a severe housing shortage remains in the U.S., hence there will be steady levels of occupancy among apartments.
- This persistent rental demand ensures that multifamily real estate investments provide consistent cash flow through rental income, which can help investors weather economic downturns.
- Historically, real estate investments have been less volatile than the stock market, providing a more stable return on investment.
- Development deals remain difficult to pencil in until hard costs pull back. Starts have already meaningfully declined, making our value add business model more attractive.
- The data in Q12023 suggests a trend of normalizing rental growth.
- Multifamily real estate continues to provide tax benefits, and hedges against inflation.
At Viking Capital, we create operational efficiencies and strategically upgrade our properties to ensure our investments continue to drive up NOI. This gives our investors long-term appreciation of their capital, steady cash flow, tax benefits, and creates a meaningful source of passive income.
In fact, on our most recent acquisition Crossings at McDonough our investors are immediately getting their distributions, and NOI is already hitting year 1 proforma targets. Even during a mild recession, the benefits of investing in our strategic multifamily acquisitions continue to provide investment and capital safeguards.
Looking to learn more about multifamily syndication investments?
