Good Times Are Here Again For Multifamily Properties

In the next two years, the demand for multifamily homes is all looks set to rise said RCN Capital’s chief financial officer Justin Parker.

According to Parker, a mix of low rates, higher construction costs, limited supply, rising house prices, and the ending of COVID restrictions have all rekindled a renewed interest in multifamily investment.

As part of its investment portfolio, the private lender offers to complete construction, fix and flip distressed homes and Airbnb vacation rentals.

The two most current popular products are RCN’s long-term 30-year fixed loans and fix and flip program for multifamily he added.

Speaking to MPA, Parker said: In the United States there is a huge market for this type of housing, because of the huge shortage of supply.

There is a shortage of 5.5 million homes in the US says the National Association of Realtors (NAR) data.

Meanwhile, the median home list prices have gone up by a record 23% during the pandemic.

According to Parker, the current situation is ideal for multifamily properties from an investor’s perspective, he added that the sector was in a bad shape when the pandemic first hit in early 2020 hence it was one of the slowest products to recover.

The reason being due to eviction moratoriums that were occurring in the US, along with the fact that during the shutdown people were out of jobs, and the majority of the multifamily sector is built on workforce housing.

Without income, it disabled their capacity to pay rent, leading the multifamily product to dip.

Now people are back at work and returning to cities and urban areas but high house prices will make it an obstacle for entry-level people who may need a home to live in, but can’t afford to buy because of the high prices.

According to the rental website Apartment List, the rent prices too rose by 9.2% at the beginning of the year, the national median rent rose by 11.4% -which is almost 8.1% high compared to pre-pandemic.

There are close to 43 million and 44 million people who live in rented homes shows in the US Census Bureau figures.

Parker said RCN Capital was now investing heavily in the multifamily product because the demand for multifamily property types is likely to keep increasing over a period of time.

Reference Source: MPA

https://www.compareclosing.com/mortgagenews/good-times-are-here-again-for-multifamily-properties/

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