In 2022, the multifamily property market is still attractive. Prices remain low, and demand is still strong. Now is a good time to invest in a property that you can live in while making solid money.
There are a number of reasons why this is a good opportunity for investors, and today we will highlight three of them.
Solid Investment
One of the biggest appeals of multifamily investing is that it’s a relatively solid investment. If you’re looking for a way to put your money to use with a strong return, then this is a good option.
Since the global economy softened in early 2020, real estate has remained relatively stable. This is due in part to fewer people traveling and more people staying at home, mitigating the need for more accommodation. It also means that developers have had fewer new projects to offer, and existing projects have filled up.
Multifamily is a great choice because you’re getting good rental returns with an investment that is likely to appreciate in value. The Federal Reserve Bank of Philadelphia reports that since 2010, the average multifamily property’s value has increased by 12% annually.
Low-Interest Rates
Interest rates are at historic lows, providing further incentive to invest in real estate. For those who have money to spare, this is a great chance to make sure it’s working hard for you.
It’s well known that the main driver of the real estate market is financial institutions. However, even those who aren’t directly tied to a bank or a loan shop can take advantage of this environment. The key is to find a real estate investment that you can afford, and then take out a home loan with the intention of paying off the investment as soon as possible.
With the current rate of inflation, many are looking for safer places to put their money. Some of the most attractive multifamily real estate properties are in desirable locations that are close to amenities and have good transit connections. As a result, they can expect good rental returns and little to no capital loss due to rising costs.
Location is key when searching for multifamily investment, as you want to ensure that you’re getting the maximum value out of your rental returns. Take the time to visit some of the popular locations that you can invest in, such as Brooklyn, New York, to get a sense of what’s available and how much you can expect to make.
Tax Advantages
There are also tax advantages to investing in multi-family properties. Most notably, you can deduct the interest on a home loan you take out to invest in a rental property. You can’t claim this deduction if you purchase a house for yourself.
In addition, you can claim tax deductions for the maintenance costs of a rental property. You’re allowed to claim these deductions even if you don’t have the money to pay for them yourself. The IRS also allows you to deduct the expense of buying materials for repairs. You can’t claim this deduction if you’re building a new house.
If you want to deduct your income taxes, investing in a rental property is a good option. You get to claim the interest payments as a home loan, and any expenses related to maintaining it are also tax deductible. Of course, you have to buy the right kind of property for these deductions to apply.
Not only is this an attractive opportunity for investors, but it’s a good chance for young professionals to get in on the action. With low mortgage rates and increasing demand, it’s the perfect time to buy a home in a desirable neighborhood.
