We found this article written by Lee Kiser of Forbes Magazine to be insightful.
“Yes, apartments are still a good investment, but for more fundamental reasons than during the past eight years. What I mean by this is apartments have always been a good investment. Unlike other commercial real estate investments, apartments are tied much more to residential trends and demographics. Starting in 2010 and continuing through early 2018, the fallout from the crash and recession created an imbalance in homeownership that gave rise to an increase in apartment rental rates. The rent increase directly correlates to an increase in the value of apartment buildings. But apartments are still a good investment for traditional reasons versus heavy appreciation, even with changing circumstances such as rising interest rates, rising property taxes and a potential recession. If investors focus on property fundamentals, hone their investment strategy and conservatively underwrite for today’s market, apartments are still a high-performing investment in 2019.”