While no investment is 100% recession proof, Multifamily apartments are extremely resilient during economic recessions and downturns. Why is that? What makes apartments so resilient?
Investing in apartments has many benefits: cash flow, appreciation, scalability, tax benefits, and more. One of the major benefits is that apartments are resilient during an economic downturn. Having shelter is a basic human need. Renters and owners will often sacrifice something else before they lose their home. They may downsize their home, but they will live somewhere.
Apartments are very resilient because there are multiple tenants living in the complex. A 100 unit apartment complex will typically have 95-97% occupancy. This means that only 3-5 units in a complex do not currently have someone living there. The types of apartments that we invest in are working-class units. That means that the average family can live there. During a downtime, people may downsize and move into our complex.
Ultimately, due to shelter being a basic human need, people may make changes to their lifestyle, but they will do everything they can to continue to have a home. Having 100+ units in an apartment complex reduces the risk that the apartment complex will not cash flow, making apartment complexes a great investment.
To learn more the benefits of investing in multifamily, please visit our Knowledge Center. To find out how you can passively invest, please schedule a time with us or contact us, and we will reach out to you.