In times of recession, multifamily properties have historically been an ideal place to invest capital. The pandemic has shaken the retail, industrial and office real estate sectors. Real estate investors are looking for a safe haven. Is it time to buy multifamily investment properties? Read on for more insight.
Even During Volatility People Need a Place To Live
Even in recessions and pandemics, people need a place to live. Some are choosing to downsize from single-family homes to apartments to reduce costs. Some existing apartment residents are trending up or down in square footage at time of lease renewal while also assessing location depending on current job status.
Houston Seeing Signs of Moving Forward
Despite Covid-19 and the oil glut, economists are predicting that Houston will experience some of the least drop in unemployment of all American cities. According to Berkadia, a leader in mortgage banking and loan servicing for the commercial real estate industry, the year-end 2019 population of the Houston Metropolitan area was 7,171,100 people, a 1.4% year-over-year increase. A thriving population that needs apartments.
Currently, Houston apartments are experiencing rent increases in month-to-month rents despite the pandemic and continuing economic volatility. According to Adobo, an online marketplace and the Houston Chronicle, from May to June 2020, median rent in Houston increased 0.51% for a one-bedroom apartment and 1.24% for a two-bedroom apartment.
While we will likely continue to see some economic volatility as we emerge into our new normal, we are beginning to see glimmers of light on the horizon. In May 2020, Texas added 237,800 jobs.
Multifamily Deal Pipelines Showing Sign of Life Again
The Paycheck Protection Program (PPP) contributed to the slowing of multifamily deals as many lenders had to quickly change gears and service a massive influx of loans. According to the SBA, Texas businesses have received 175,418 approvals totaling over $12.7 billion dollars for the second round of PPP loans through May 01, 2020.
The multifamily deal pipeline is showing signs of life again as lenders are freeing up from PPP loan expediting and are concentrating on normal day to day business moving forward.
We continue to field an increased number of apartment acquisition inquiries from global investors seeking safe havens in multifamily assets and professional multifamily property management services. Texas continues to be at the top of the multifamily acquisitions list. We also see some apartment owners struggling with daily operations during these changing times. We have been able to offer valuable insights to owners on ways to manage resident expectations, maximize collections and continue increasing occupancy with high quality residents.
Is It Time to Add To Your Texas Apartment Portfolio?
A solid operating partner can guide how and when to add amenities, upgrades and services to maximize ROI. They can also perform detailed due diligence to find hidden value and hidden risks. We have lived, worked, employed and invested in Texas for decades. We are fully embedded in the Texas apartment market. We guide multifamily investors on how to strategically acquire, position, add value, and manage portfolios for optimal returns.
Socially Responsible and Ethical Investing
At Better World Properties LLC, we believe that socially responsible investing (SRI) in real estate is one of the paths toward building a better world, while serving as a time-tested investment. If you’re ready to begin your journey as a multifamily owner, or you desire to increase ROI on your existing apartment property portfolio, give us a call us today at 713-559-6975 or drop us an e-mail to info@www.betterworldllc.com. Better yet, come visit. We love talking apartments.
Doing business in Texas is a pleasure where we still believe our word is our bond and a good, strong handshake (or gentle fist bump) is priceless.
Your Better World Properties LLC Team