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For Estate Planning, Estate Administration And Disputes

Foreign investors consider multi-family homes

On Behalf of | Apr 27, 2018 | Blog |

If you are following the trends of real estate investment in the United States, you may be interested in how the changes in the culture play a role. The recent generations have not had an easy time finding meaningful employment, and as a result, many young adults remained in their parents’ homes, delaying their own families for longer than past generations.

Now that these so-called Millennials are striking out on their own, they often find themselves unable to afford the dream of homeownership. This is exciting news for investors like you, who are looking for opportunities to invest in real estate in New York or other U.S. cities.

Changes in demographics and property classification

Millennials are quickly becoming the largest demographic in the country, overtaking baby boomers. However, since both of these age groups are renting rather than owning their homes, you may have the opportunity to capitalize on their preferences for apartment life. Investment in multi-family homes has not been this high since the early 1990s. Investors from outside the United States make up a significant portion of overall investors in multifamily real estate in this country.

If you are interested in exploring core real estate, be aware that the definition of this investment may be shifting. Once believed to be Class A luxury apartments in the heart of a metropolis, core properties had tenants who were carefully vetted and well qualified. However, because of the glut of luxury apartments, it is becoming more difficult to keep them at full occupancy.

Luxury buildings may no longer be ideal investments

You may discover, as have other foreign investors, that there is a more reliable investment in traditionally Class B apartment buildings, those that may be a little older with tenants who are not so wealthy. The high cost of materials and lack of skilled laborers means developers are not building as many newer Class B multi-family dwellings. Your investment in a Class B apartment may provide you with a better yield than if you purchased a luxury building.

When considering an investment in real estate, you may keep in mind that an important part of core properties is their demand. Since demand is high for Class B apartments in the suburbs or beyond the limits of a metropolis, you could certainly benefit from exploring this type of property to include in your investment portfolio.