Multifamily syndications offer many benefits for investors looking to get involved in the apartment real estate market. Real estate is an IDEAL investment because of income, depreciation, equity build up, appreciation, and leverage opportunities it provides ordinary investors. In this article, discover the top 7 reasons to invest in multifamily apartment syndications.
Intangible Benefits – More Time, Options and Impact
There are many reasons to invest in multifamily syndications apartment real estate, including the intangible benefits of time and financial freedom, as well as the opportunity to make a difference by providing quality housing. Investing in multifamily syndications apartment real estate can offer greater time freedom to enjoy loved ones and hobbies. It can also lead to increased options, that can support one’s goals of avoiding burnout from work. In addition to making a profit, investors also feel a sense of fulfillment by providing tenants with quality housing. Programs are designed to impact lives at the apartment complexes and foster stronger communities.
Greater Income
Multifamily apartment real estate investing allows you the opportunity to generate true passive income, without the landlord duties. Passive income from real estate investments can supplement an individual’s current income, help one save for retirement, and provide funds for other savings goals, like saving for a child’s college tuition or a family vacation home.
Real estate investing offers the potential for monthly cash flow and distributions. With careful planning, real estate investing can be a tool to achieve financial security and reach personal milestones.
Capital Preservation – Lower Risk & High ROI
Economists from CBRE conducted a study on the best performing apartment housing categories and found that Class B properties tend to perform best during recessions. They also found that Class C properties with higher rents can be quite resilient as well. Mitigating risk must be a top priority in real estate investing, as real estate is considered a safer investment than stocks, especially when facing the volatility of the stock market.
Profit / ROI
Multifamily real estate investing offers rewarding rates of returns on investment (ROI). Real estate syndications typically have an ROI of 15% or more, which is better than stocks. Passive investors typically enjoy monthly or quarterly payout distributions from the property cashflow. Though their initial investment is illiquid for generally 3 to 5 years, investors typically receive a significant payout along with their initial investment, upon selling or refinancing the property.
Reduced Taxes
Real estate investing offers significant tax benefits, including accelerated depreciation and cost segregation, possible 1031 exchanges into new projects, and a tax-free return on your initial investment. These advantages make real estate an attractive option for high wage earners and self-employed individuals who are looking for legal ways to reduce their taxes. Contact your an experienced CPA to learn more.
Variety of Funding Options, including SD-IRAs and Solo 401Ks
As an investor, you have several funding options to invest in syndications – Cash, Self-Directed IRA, Solo 401K, SEP IRA, SIMPLE IRAs, Trust, and entities like LLCs. Self-directed IRA is the most popular funding option for investors within multifamily syndications. Future investment opportunities require that funds are liquid when signing -up or subscribing to a deal. Investors should be cognizant of the subscription period because it is typically a first-come, first serve period; and it can take weeks to get funds liquidated.
Stabilize your portfolio
When you invest in multifamily apartments, you can stabilize your portfolio, especially if you are investing in other investment types, like stocks or cryptocurrency. Diversification is a good idea, especially during periods of economic recession or macroeconomic uncertainty. Consider your investments across multiple investment types or asset classes to limit exposure to any one type of asset. This strategy also helps reduce portfolio volatility over time.
There are several benefits to investing in multifamily apartments. Andrew Carnegie once stated that 90% of millionaires are created by investing in real estate. To start living life on your terms and building a legacy of generational wealth, consider investing in multifamily apartment syndications. If you’re interested in learning more about this topic, click here.
If you are interested in future investment opportunities, click here.
By Kelsie Mans-Ray
KMR Multifamily Acquisitions / Syndicator
NOTE: This information is of a general, educational nature and may not be construed as tax, financial, or legal advice pertaining to a specific offering, exemption or situation.
