Multifamily Investment Properties

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What are multifamily investment properties?

Multifamily investment properties are residential assets with five or more units on a single property. For example, apartment buildings.

How do you purchase an apartment building?

Partnership: Purchasing an apartment building is an immense financial responsibility and commitment. To help lessen the responsibility and commitment investors will acquire an apartment building with a partner(s). Partnerships allow investors to combine their capital to purchase apartment buildings that they wouldn’t be able to purchase as an individual. Partnerships also decrease the level of risk that each investor will hold in the deal.

Individual: Investors can also purchase an apartment building on their own if they have enough capital to carry out the acquisition. These investors are typically experienced commercial real estate investors.

Real Estate Investment Trusts (REITs): REITs make owning real estate accessible to the average investor. REITs are companies who focus on acquiring and managing real estate investment properties. Certain REITs focus on acquiring and managing apartment buildings. An investor can purchase an apartment building focused REITs shares in the stock market and become a partial owner. The shareholder will benefit from the property’s appreciation and rental income through the stock’s growth and dividends.

Real Estate Investment Trusts (REIT)

Equity Residential (EQR) is a REIT that invests in apartment buildings. The trust closed 2020 with over 77,000 units in California, District of Columbia, New York, Massachusetts, Washington and Colorado. The REIT offers a 3.40% dividend yield.

AvalonBay Communities (AVB) is a REIT that invests in apartment buildings. The trust closed 2020 with over 79,000 units in the New England region of the United States: Maine, Vermont, New Hampshire, Massachusetts, Connecticut and Rhode Island. The trust also owns units in New York, District of Columbia, Washington and California. The REIT offers a 3.46% dividend yield.

UDR, Inc. (UDR) is a REIT that invests in apartment buildings. The trust closed 2020 with over 47,000 units in California, District of Columbia, Colorado, Florida, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Tennessee, Texas, Virginia, and Washington. The REIT offers a 3.31% dividend yield.

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