What is the expected trend for Multifamily Property?

I am thinking of purchasing some multifamily properties as an investment and I am concerned that the general multifamily market direction may follow the residential market. Is the market for apartments expected to rise or fall?
In Buying Property - Asked by Chris T. - Dec 23, 2008
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Answer(s)

Jodie H.
Broker/Agent
Missoula, MT

Happy Holidays Chris.
I have been asked this question many times and feel strongly about the answer. With fewer and fewer individuals able to qualify for the tighter loan requirements to purchase a home with, more and more families and individuals are renting. For those who own the multifamily properties they are finding it easier than ever to keep their units full. However; a word of caution in areas seeing large layoffs and companies closing. These areas are having trouble with renters unable to maintain their rent. The hardest part in this market is being able to find sellers of multifamily properties that are willing to sell where the property will pencil. It is important that you find an experienced agent that can show you all of the data so that you can make an educated and wise decision once you find a property you like. I feel that the multifamily properties will continue to do very well for a good long time, the turn over rate of these properties is much less than residential properties. Investors of these types of properties do not tend to buy with little to no money down, not to mention lenders require much more anyway!

Dec 23, 2008
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Brian R.
Owner/Investor
Chicago, IL

I agree with the previous answer but also would like to add that the class of the multifamily is a factor that is important. In Chicago Class A & B properties have lost 10 to 15% of market value over the last year while C & D properties are holding value with an estimated 5% loss in value over the same period.
I feel it is a good time to buy multifamily now and focus on C & D and will look at A & B in the second half of 2009.

Dec 24, 2008
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Chris S.
Broker/Agent
Coeur D'alene, ID

It varies substantially from one market to the next, but if I were to generalize I think the multi-family market is going to see increases. People are loosing their homes and will need to rent, at the same time more and more first time buyers are staying out of the home purchase market ... thinking they will get a great deal next year when the market bottoms out.

Jan 5, 2009
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