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  • Shane Carter

Stock Market Vs Passive Real Estate Investment

Multifamily commercial properties have proven to be an incredibly lucrative investment strategy for passive investors who are looking to diversify their portfolios outside of the stock market and other standard type investments. This is due to the fact the multifamily housing asset class has not only been a historically strong investment vehicle, it is also expected to continue on that path well into the future. Rental rates steadily increase over time, and there will always be renters who are looking for clean, comfortable, and safe places to live.


In essence, there will always be a demand for rental units since shelter is at the top of the list of basic human needs across the United States. The opportunity to create a solid cash flow in an alternate investment that has an incredibly strong upside makes investing in multifamily commercial assets a popular place to deploy capital. This holds especially true for passive investors who want to simply invest their money and watch their investment grow by taking a hands off approach. A great deal of potential real estate investors are under the impression that the only way to invest in multifamily commercial real estate is by taking the active investor approach.


However, you do not need to take the time, effort, expense, and responsibility of purchasing an entire apartment building on your own. You do not need to concern yourself with managing the building or even paying for the added expense of hiring a property manager. The good news is that you can take the passive investment approach by investing with a commercial real estate development company that specializes in buying, managing, and properly maintaining multifamily commercial properties.


Keep in mind that everyone needs a place to live, and investing in an affordable and well-maintained apartment building will always be in high demand. The investment opportunity provides stability even during uncertain times due to the fact that multifamily commercial real estate has the ability to keep up with inflation. This is easily accomplished through the use of incremental rent increases. When you invest in a multifamily commercial building that has hundreds of units, the vacancy rate does not have a large impact on you since leasing is merely a function of property management.

A good commercial real estate development company will initiate a solid plan that will reduce your potential risks including the offset of tax related burdens. For example, a cost segregation study provides significant tax benefits that relate to accelerated depreciation that is shared with all partners in each particular deal. The bottom line is that as a passive real estate investor you are truly hands off, but are investing in a safe, tangible asset. You receive the benefit of having a team of real estate investment professionals managing all aspects of your investment, while you simply sit back and receive disbursements.


If you would like more information regarding passive multifamily commercial real estate investing or are interested in investing with us please contact Community Investment Properties today. Our main goal is to provide our residents with a living experience where their satisfaction is our highest priority while maintaining the highest quality assets for our investors. We know that solidifying lasting relationships through transparency and respect are the surest ways of building prosperous communities.


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