Benefits of Multifamily Investing vs. Stock Market

How multifamily investing is more beneficial than the stock market

Even in strong economic times, the stock market can always be volatile. One of the best benefits of multifamily investing is the fact that it’s a consistent and steady return. 

Since it’s outside the parameters of the stock market, it’s not directly affected by those major downtrends we’re seeing. Multifamily investing is akin to starting your own business. You’re directly investing in something that’s meant to generate revenue due to its utility. 

Investing in a stock may pay out dividends to shareholders, but that’s for a select few stocks and requires huge capital investment to consider truly passive income. For the majority of the market, you’re investing in stock with the assumption that as the company grows, so will each share of that company you own. 

As a result, there’s relatively no utility to that stock, and you can only redeem it for its value in many cases. You’re also relying on the business owners of the company to ensure its success, and that’s not ever guaranteed. 

This is currently happening, as many companies are not performing where they ought to be and are missing their earnings, or their earnings are not as strong as the market assumed they would be. 

So when it comes to multifamily investing, again – it’s a completely different model, and it’s a business model more than an investment model since you’re having your money go into something directly making money. 

How multifamily investing is a better option than traditional real estate investment

When looking at real estate, you think about building a few properties and having them generate income through rentals. Then, you can set up a system, and it all becomes passive income in most cases. Yet the reality is that it takes a long time on your own, and managing even one property as a landlord, let alone as a property manager, can become a secondary or full-time job in many cases.

What you want to consider is multifamily investing, as this approach allows you to simply join as a limited partner with a group of investors that work with properties that collect multiple sources of rental income per month. 

This means that you’re able to mitigate the risk of someone not paying rent for one month or having people move in and out, and the rental payments come in later because you’ll be investing in a property with more than one renter. 

As a limited partner, you’re also adding to a much larger pool allowing for preferential pricing on buying properties and, in many cases, avoiding the need to finance those properties. This can be an issue as the interest rates are continuously on the rise, another factor affecting the stock market, and wouldn’t affect your multifamily real estate investment. 

What if the stock market recovers? 

The stock market can indeed outperform the real estate market in a healthy economy, which we currently are not. However, it’s also historically true that there will also end up being another bull market with stocks, where all the stocks are going up and rushing with positive economic news, and business performance resumes to be a lot stronger than it has been. 

That’s great news, and when that time comes, as one of our new limited partners, you’ll be able to ride that stock market with all the additional funding you’ve received from the consistent monthly passive income installments, as well as the appreciation on the property over the months and years. 

So you’ll have an asset that makes you income that can go directly into the market, or you’re always able to cash out of your investment and make a bigger investment down the line as needed. 

When you’re ready to start having your investment work its hardest – feel free to reach out to us.