Ashcroft Capital Explains the Benefits of Investing in Multifamily Vs. Single Family Real Estate

One of the most common question Ashcroft Capital gets asked is, what`s better? Investing in single-family real estate or multifamily properties? While Ashcroft Capital is (for obvious reasons) a huge advocate for investing in multifamily properties, they advise investors to assess the type of involvement they’re willing to commit to when choosing which would be a better fit. While both generate income and are often said to be no better than the other, it’s best to carefully weigh your decision.

 

Multifamily properties differ from single-family properties as this type of property can host more than one tenant. Multifamily properties encompass apartment buildings, condominium communities or any real estate containing more than one unit. Single family properties, on the other hand, include homes that house one family – this can be a condo, a house or a townhouse amongst others.

There are several advantages associated with investing in single family properties that cannot be guaranteed with multifamily investments. One of which is a broader range of potential buyers. Single family properties often sell quicker for this reason. In addition to this, because you will be dealing with a singular tenant, there is less risk for conflicts to arise. Landlords only have one tenant to hold accountable for payments and proper property care.

 

However, some might consider this to be a disadvantage when the tenant decides to vacate the unit. With the tenant gone, you will not acquire any other income to offset the vacancy. Another disadvantage is the cash flow – investing in single family homes rarely amounts to the cashflow you can gain from a multifamily home investment. And in spite of having a broader demographic in comparison to multifamily consumers, single family homes tend to charge higher rent rates and are typically located in less convenient areas, away from the high density locations that many multifamily units occupy.

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As for investing in a multifamily property, one of the more highly valued pros is its potential cash flow since each unit is typically slightly lower in price in comparison to single family homes. Having rent from more than one tenant helps to cover operating costs. This is especially helpful being that there are fewer vacancy issues when investing in multifamily units. Another significant pro worth noting is the amount of control multifamily property investors have in the future valuation of the property, whereas single family homes are subject to economical factors.

 

Of course, this too can be seen as a disadvantage if you’re not willing to put in some work and creativity to generate maximum income from the property. Maintenance does tend to be higher in multifamily properties with building appliances or services having to be replaced from time to time. In addition to this, some are discouraged by the mere thought of tenant disagreements and a tendency to sell at a slower pace than single family real estate.

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Though both are investment properties, some questions you should take into consideration when choosing between the two are:

• Are you willing to or capable of covering costs when your single family unit has been vacated?
• Does the simplicity of investing in a single unit outweigh the cashflow benefits of a multifamily property?
• What’s more important to you? Selling quickly or expanding your portfolio?
• Are you willing to hire a team of professionals to manage the daily maintenance of a multifamily property?

 

Consult with one of our members to decide if multifamily property investing is for you!

Things Ashcroft Capital Keeps An Eye Out For When Investing in Multifamily Properties

For choice firms like Ashcroft Capital, investing in multifamily property with the right qualifications is an important factor when it comes to the building’s return value. Immersed in the industry for over a decade now, Frank Roessler, founder of Ashcroft Capital and his team have learned to make the distinction between multifamily housing with high potential earnings versus a low-grade unit with a lesser profit potential. These multifamily buildings can be classified as “A”, “B”, “C” and “D”, depending on their marked attributes.

 

Ashcroft Capital Firm recommends seeking out class “A” or “B” multifamily housing to warrant the best outcomes when investing. Here are the traits distinguishing the two classes:

Class “A”

Class “A” multifamily buildings have been running for a decade and have been substantially renovated over time. These properties are located in Central Business Districts, are well merchandised with landscaping, and offers high-end interior and exterior amenities.

 

Class “B”

Class “B” multifamily buildings have been built within the last 20 years. The building’s construction is in good form with little delayed maintenance work. The interior and exterior packages may be a little dated, but the overall condition of the building is adequate.

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Both classes are located in major markets and have a greater command of interest from lenders. These building types typically have more financing options, lower rates, longer fixed rate terms and amortizations, a lower debt service coverage and are a primary source of collateral.

 

In addition to these Class “A” and Class “B” traits, Ashcroft Capital’s team further investigates the buildings condition by looking out for additional efforts to attract desirable tenants. These qualities include:

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Good Safety Conditions

While location is an important factor to ensure safety, it’s important the building staff and facilities have taken great measure to promote safety on the premises. For example, having a well-lit property in key areas including doorways, hallways and parking lots is something that would appeal to prospective tenants, as well as a foolproof security system to deter unwanted guests or reduce theft.

 

Cleanliness

Areas such as the parking lot and other common spaces should be well-maintained. This gives a clear indication that the building’s staff and management have a responsibility to its tenants when it comes to proper hygiene and sanitation. These positive attributes that entice tenants can in turn impress investors.

 

Renovation Upgrades

Tenants are easily enticed by upgraded renovations, even if it’s as simple as a fresh coat of wall paint or swapping out carpets for tile flooring. These changes go a long way in terms of making tenants feel more comfortable and “at home”.

 

All of these factors combined add value to multifamily properties and are well sought-after by successful investment firms like Ashcroft Capital. When looking for the right multifamily property to invest in, look for these assets to optimize your potential and gain high revenue.

How an Apartment Industry on the Rise Benefits Ashcroft Capital Investors

There’s been a drastic shift in the housing market as more and more of the general population elect to move into apartment buildings. Multifamily property investment firms like Ashcroft Capital have noticed a spike in this trend with the recent increase in investors looking to fund apartments, condominiums and building communities. The 2008 housing crisis has made a significant impact on real estate purchasing behavior, causing all age groups, particularly millennials, to give up on the traditional home model. Now multifamily developers are moving with the trend, creating new and attractive solutions, designs, and architecture to meet these shifting demands. This “rethinking” has the apartment industry predicting no signs of slowing down anytime soon.

Portrait Of Happy Young Couple Sitting On Floor Looking Up While Dreaming Their New Home And Furnishing

For millennials (who represent the largest consumer group), owning a home may not be their first priority as lifestyle choices have deviated from the more traditional passage: stay home, save money, get married and move into a home. A report from Business Insider quotes US economist Michelle Meyer who says, “We believe the delay in homeownership is due to tighter credit standard and lifestyle changes, including delayed marriage and children.” In addition to this, witnessing the market crash in their earlier years may have made millennials skeptical of investing in a hard asset that may not retain its value.

6 reasons why more millennials aren’t buying homes

Millennial homeownership in the US is at a record low. The age range of millennials – Bank of America Merrill Lynch economists used 25 to 34 – is usually prime time for purchasing a first family home. That demographic factor is one reason why some housing economists are bullish on demand.

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Apartment consumers are not limited to millennials. Baby Boomers and Gen X’ers are both opting to rent as well. One of the primary reasons for this is not having enough savings for retirement. According to an article published in Bankrate.com, over 66 million Americans do not have sufficient funds saved for retirement. Many of these individuals are opting to sell their homes for a quick return, to later rent cheaper properties. These groups are also drawn to the idea of renting for the simple reason that the maintenance is easier.

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With rental properties in demand for these reasons and more, businesses and surrounding industries are developing new services to cater to these consumer groups. Already this has had a significant impact on new construction, housing options and marketing efforts. More buildings are being built, short term rental platforms like Airbnb are proliferating, and now, the multifamily industry is tackling smartphone devices as consumers search for listings through their phones. Ashcroft Capital affirms it’s been a busy year for the firm with the apartment industry thriving. Founder Frank Roessler and his team are predicting more prosperous years to come.

Tips on Investing in Multifamily Properties from Ashcroft Capital’s Team

As a result of the Great Recession, the multifamily housing market has been rising in demand. Its financial downturn has had a large impact across all generations, driving millennials to rent and baby boomers to downsize heading into retirement. According to a recent Forbes article the multifamily market comprises of 25%-30% of all commercial real estate. This figure is quickly increasing with apartments, condominiums, student and senior housing being rented by many consumers. For over three years now, esteemed multifamily investment firm Ashcroft Capital has successfully infiltrated the multifamily market by identifying strong investment opportunities while overseeing and constructing solid business plans for each asset.

 

With Ashcroft Capital’s goal in mind to reposition properties through operational efficiencies, Ashcroft’s team has gained considerable insight on what to expect when investing in multifamily properties. Whether they’re making moderate or extensive renovations to achieve this objective, Ashcroft Capital, along with its founder Frank Roessler, ensure investors deliver with careful due diligence when covering all aspects such as deal sourcing, acquisitions, financial modeling, debt structuring and asset management.

For tips on investing in multifamily properties, Roessler recommends choosing the right team of professionals to help. Experts from Ashcroft Capital’s firm can help you determine the more crucial aspects that require an overview. Roessler’s experience overseeing the underwriting and acquisition of over $250 million worth of multifamily assets, in addition to spearheading the asset management of a portfolio valued at approximately $500M assets, has led him to profit expeditiously in his more recent acquisitions. Investing in a multifamily property without any well-rounded experience is risky – you want to find a firm that covers all aspects as opposed to hiring a general inspector. Firms like Ashcroft Capital understands the importance of delving into each component of the building. This includes informing you as an investor on the communities’ local practices, customs, and financial cash flow.

 

First-time investors mistakenly value a multifamily property at its price per square foot. Roessler’s firm debunks this common misconception, informing clients that properties are valued at their generated income and return on investment. Roessler advises to assess your investment for its potential – not for what it is currently selling at. The physical and financial aspects of the building will have a significant impact on its value. Consider the following: an outdated unit, an unreliable landlord, new management… all of these factors should be taken into account.

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There is a lot to take on when investing in multifamily buildings. While the demand continues to thrive, investors are encouraged to be mindful of the task at hand. Investing in multifamily properties means increased responsibility, liability and capital flexibility to meet growing demands. Use a team of professionals, such as Ashcroft Capital, to ensure you’re using the best methods for investing.

What it’s Like to Work with Real Estate Investment Firms like Ashcroft Capital

Now more than ever, people are looking into real estate as a way to invest in the future. New to the industry, people look to invest in properties like houses, apartment units, commercial properties and other types, earning extra income to plan for retirement and send their children off to university. Some rely entirely on these earnings to pay off life expenses.

 

Real estate investments can offer steady cash flow and promise greater returns than you might make from conventional investments like stocks and bonds. The prospect is increasingly becoming more and more popular, especially with hassle-free options available for people looking to invest without having to worry about time, cost and the risks that come with owning an investment property. With multifamily property investment firms like Ashcroft Capital, you get the exposure you need to the real estate market, without having to manage or maintain your properties on your own.

 

Ashcroft Capital
Image: ashcroftcapital.com

Property investment companies like well-renowned Ashcroft Capital, a multifamily property investment firm, buy properties to make money from them. As an investor working with this company, you have the benefit of earning capital while knowing that your investment firm is taking care of the rest of the matters with a carefully devised strategy plan. This includes the selection process of your chosen property, dealing with paperwork, legal issues, managing the property, and more. In exchange for this, the firm or company receives a percentage of the investor’s monthly rent.

 

 

 

Ashcroft Capital prides itself on its rigorous methods, securing the best return on investment for its investors. The processes involve extensive research and evaluation, exceptional sourcing and structuring, an aggressive and disciplined approach managing assets, strategic and tactical risk mitigation, and finally, efficient and timely execution, while maximizing proceeds. Working with the experts will help you to understand market demands and can result in a long-term relationship as you build on your acquisition portfolio.

 

With most investment groups, the lease will be under the investor’s name and all of the units cover a portion of the rent, should there be any vacancies. This will ensure there are sufficient funds to pay the mortgage even when the unit is not occupied. There are several other ways of investing with a company; this, however, is the most common method.

 

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Book a consultation with Ashcroft Capital to see if their strategy will help you to achieve your goals as an accredited investor. Company founder Frank Roessler and his team of experts can help you to successfully invest in properties with a tangible plan. As an investor working with a firm, you will gain more than predicted earnings.