What’s Driving Performance in the Apartment Sector?

There is no better time to invest in multifamily real estate. Demand is high and competition is manageable, and funding is out there. Some attractive highlights of multifamily investing are that it’s easier to fund, tenants are always available, and the ROI is much greater than single-family homes.

Demand is continuing to grow in the following renter’s demographics:

  • The younger half of the “Echo Boom” generation (those born after 1986) is expected to add more than 11 million renters over the next decade. Individuals under the age of 35 have the highest propensity to rent of any demographic.
  • New citizens have a high propensity to rent apartments and since 2000, an annual average of 1 million people with diverse backgrounds became citizens, permanent U.S. residents. In 2011 these new residents predominantly came from Asia (43%), North America (31%), and Europe (13%).
  • More people, including down-sizing baby Baby Boomers and older retirees, are opting to rent rather than own; when those 65 and older move, 59% move from single-family home to multifamily dwellings.

As a result, homeownership has dropped nationwide from its peak (69% in 2004) to 66%. Each percentage point decline represents the movement of approximately 1 million households to rentals.

Jeff Klotz is an American entrepreneur, author, father, speaker, and husband.  As a young businessman, Klotz first gained success in the real estate industry and later became best known for his work in the private equity real estate investment space. He is the founder and operating manager of The Klotz Group of Companies, a vertically integrated & comprehensive private equity real estate investment platform operating in over 20 States throughout the US.