Why August Is the Perfect Time to Review Your Real Estate Strategy
Picture this: you’re a busy professional juggling a demanding career with a family life that keeps you on your toes. You’ve got a nagging feeling that you should be doing more to secure your financial future, but the thought of adding another ball to your juggling act is overwhelming.
Enter ground-up multifamily developments. This real estate investment opportunity may be the secret sauce missing from your portfolio. These investments offer a chance to get in on the ground floor (literally!) of a new housing project, unlocking higher returns and tax advantages that will give your wealth building efforts a serious boost.
But before you dive in headfirst, take a closer look at how these investments work and whether they’re the right fit for your unique financial situation.
Ground-up multifamily development projects typically involve a longer timeline and multiple phases, including land acquisition, entitlement, construction, lease-up, and stabilization. By investing in a ground-up development, you have the opportunity to be involved from the very beginning while professionals handle the project’s direction on your behalf.
When you purchase an existing property, you inherit pre-existing issues, such as deferred maintenance, outdated systems, or structural problems. These issues often lead to unexpected expenses and headaches down the road, eating into your returns.
Plus, with an existing property, you’re limited by the current layout and design, which may not be optimized for maximum rental income or tenant satisfaction.
On the other hand, ground-up developments allow you to start with a clean slate. Our team works to create a property tailored to our target tenants’ needs and preferences, incorporating modern amenities, energy-efficient features, and a layout that maximizes rental income.
While ground-up projects do come with their own set of risks, such as construction delays or unexpected costs, these are mitigated by working with an experienced development team and thoroughly vetting the project before investing.
Ultimately, the choice between a ground-up development and an existing rental property will depend on your investment goals, risk tolerance, and the resources you have available to manage your investment.
One of the primary benefits of investing in ground-up multifamily developments is the potential for higher returns compared to existing properties. Because you’re creating new supply in a market with demonstrated demand, you can command higher rents and generate more significant profits.
Ground-up projects also offer tax advantages like depreciation and cost segregation, which optimize your investment’s performance. Finally, by investing in emerging markets or submarkets, you can capitalize on growth opportunities that may not be available with existing properties.
Ultimately, the decision to passively invest in ground-up multifamily developments depends on your individual risk tolerance, investment goals, and portfolio composition. These investments offer compelling returns and diversification benefits, but they also come with unique risks and longer hold periods.
If you’re considering investing in a ground-up project, it’s essential to thoroughly evaluate the opportunity, understand the terms of the investment, and ensure that it aligns with your overall financial strategy.
As with any investment, thorough due diligence and working with experienced professionals are key to maximizing your chances of success.
If investing in ground-up multifamily development sounds like it will be a great fit for your investing goals, apply to join our investor club so you can be notified of our next opportunity.
