Multifamily Real Estate Investing vs. the Stock Market

Real estate investing outperforms the stock market for a variety of reasons. Investors are more directly in control of their real estate investments than they are with publicly traded stocks, are not subject to the whims of large conglomerates that determine that market, and can more quickly adjust to changes in the market. Additionally, the element of leverage in real estate offers more buying power than in stocks, and (not including the very rare circumstance) it is not typical to experience a total loss in multifamily real estate.

Multifamily Real Estate Investing vs. Other Commercial Real Estate.

Multifamily real estate has also proven to be the most stable of all commercial asset types. While all commercial asset types do well when the economy is strong, retail, warehouse, office, and industrial assets often lose major tenants and can lie completely vacant during bad times. But with multifamily, owners can respond better to changing market conditions by offering concessions and incentives to prospective tenants to keep their spaces occupied.

Even in stagnant markets, multifamily real estate investing still outperforms other commercial sectors because people never stop needing a place to live. With the steady influx of housing foreclosures, people are renting in apartments, which is an affordable, and sometime only, option. Renting an apartment can provide the opportunity to begin a rental history, rebuild credit, build savings for possible future homeownership, provide flexibility in this uncertain job market, and offer a home for everyone from students to seniors.

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