Dealing with CRE investing can get quite confusing. This is why there are many misconceptions that are common. The professionals at Luxe Crowdfunding are here today to explain exactly what those misconceptions are when it comes to CREs. When it comes to real estate crowdfunding, we are the experts you want to rely on. We are available to everyone in the United States.
Multifamily Investing Is Perfect For You!
For the past quarter-century, multifamily investing has delivered strong returns to investors. According to a 2017 report by CRE, the world’s largest commercial real estate investment company, between 1992 and 2017 the multifamily asset class has generated an average annual return of 9.75%, which is a higher average annual return than any other type of commercial real estate.
This 9.75% average annual return that multifamily investors earned between 1992 and 2017 is also higher than the average annual return for owners of single-family properties across a substantially similar period, according to a study reported in Arizona Central².
Due to common misconceptions about the multifamily asset class, some real estate investors shy away from multifamily investing and focus instead on investing in single-family homes to rent out. Since the Investor Relations team here at RealtyMogul speak to thousands of investors each year, we wanted to share in this article what we have found to be the most common misconceptions about multifamily investing compared to a single family home investing.
Common Misconceptions of CRE Investing
- It is too expensive to purchase a multifamily property
- Purchasing a multifamily property is likely to cost more than purchasing single-family homes in the same geographical area. Calling a multifamily property “too expensive” misses two key points. One advantage of investing in multifamily is that it potentially enables investors to acquire residential property for less, on a per-unit basis, than building a portfolio by purchasing one home at a time. Although it will likely cost more money upfront to buy a multifamily property than a single-family residence, this does not necessarily mean an investor cannot afford a multifamily investment.
- Vacancies will ruin the property’s profitability
- With a single-family home, an investor needs only one tenant to be 100% occupied, whereas that investor would need to find and maintain multiple tenants to fill a multifamily building..
- Financing will be a challenge
- Residential loans are often based on the borrower’s personal financial situation pertaining to income, existing financial obligations, outstanding debt, credit score, and so on.
- The property will be too expensive to maintain
- Multifamily properties benefit from economies of scale, allowing for proportionate cost savings due to an increased level of production.
Call The Best Real Estate Crowdfunding Today
If you are interested in learning about real estate crowdfunding or even some more details about CRE investing be sure to call us today! We are one of the best crowdfunding sites. Here at Luxe Crowdfunding, we are entirely here for you. Our investing experts have the best expertise in the United States. We endeavor to excel in every service we provide, adding value for our investors wherever possible, and thereby succeeding nationally in the construction industry. We offer the best crowdfunding real estate investment services in the United States.