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Multifamily Offers An Effective Hedge Against Inflation

Why Multifamily Provides an Effective Hedge Against Inflation

With inflation already a major concern, investors are looking to protect their capital while also potentially benefiting from rising costs and interest rates.  Multifamily real estate has consistently been the favored asset class for real estate investors as an effective inflation hedge due to its unique advantages.

  • Short Term Leases: Apartment leases generally last no more than one year, giving landlords the ability to act in real-time and adjust their rents accordingly when faced with rising costs.
  • Essential Expense:  Shelter is a life essential and one of the last things people will sacrifice. Most people will pay their rent before paying for other expenses.
  • Supply/Demand Imbalance: There is not enough housing supply in most US markets to keep up with demand. Additionally, rising interest rates make homes unaffordable for “would-be” home buyers, increasing the demand for apartments.  More demand than supply places upward pressure on rental rates.
  • Value-Add Strategy: Strong multifamily fundamentals persist, with favorable household formation, high wages, and solid job growth bolstering demand and, ultimately, investment returns.  These returns can be further enhanced by employing a value-add strategy that focuses on renovations, management efficiencies, and amenity upgrades to justify higher rental rates.

All of the data points to the same result – invest in multifamily. If you’re serious about securing your financial future, take the next steps today.

The contents on this site are for informational and entertainment purposes only and do not constitute financial, investment, or legal advice. BAM Capital cannot guarantee that the information shared on this post or page is appropriate for you and your financial situation. By using this site, you agree to hold BAM Capital and any and all entities related to the writing & publishing including BAM Capital’s parent company harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site. Always consult your investment advisor, CPA, and other professionals before making an investment. BAM Capital is excited to help you grow your investment assets. Please contact us to see how we can help you.  

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