Location is the most significant driving force when making a decision about real estate investment. The first thing that comes to mind when we discuss multifamily real estate is the classic urban positioning of a multifamily asset. Tall buildings and busy streets are generally what you picture, but there are also many opportunities for high returns with a suburban asset. With any type of investment choice, you have to weigh the pros and cons.
In general cities are the most in-demand location for investment in multifamily. They provide the most foot traffic as well as access to transportation, other businesses and amenities which are selling points that allow for a large pool of prospective tenants. Unfortunately, cities also come with a higher crime rate, high turnover, less available space for new development and current properties are usually older and have more wear and tear. Urban developments also come with a higher potential cost of utilities, taxes and fees which can put a major dent in your profit.
When it comes to suburban real estate investment there are a lot of opportunities for growth in multifamily real estate. One of the biggest advantages to purchasing a suburban asset is that you get more property for your dollar. This allows you to appeal to renters who are interested in property with outdoor space or bigger layouts – and who historically sign longer-term leases. The disadvantages of a suburban asset include fewer amenities, less access to transportation and a much smaller pool of prospective tenants.
Location, location, location is a saying we have all had at some point in our lives heard in relation to real estate investment. Ultimately, it comes down to weighing the pros and cons against your goals and objectives in order to determine the right plan for you.
To learn more about CGI strategies and how we can help you achieve your goals, visit www.cgistrategies.com.