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Multifamily Minute Reader Reflections: How Long Do You Hold Your Properties?
We asked 45,000 multifamily investors how long they typically plan to hold their investments. Here's what they said.
There are all sorts of multifamily investors out there, with all sorts of multifamily investment strategies.
One key aspect of any investment strategy is when to exit — in this case when to sell your apartment complex and move along to the next one.
I asked you and around 45,000 of your fellow Multifamily Minute subscribers last week to get an idea for how long you intend to hold your multifamily properties. Let's explore the results below.
Survey Results
Time Period | Percent of Respondents |
|---|---|
Less than 2 years (short-term flips) | 6% |
2 to 5 years | 14% |
5 to 10 years | 9% |
More than 10 years | 71% |
My takeaway from this: Maybe I ought to focus more of my writing on the longer-term strategies.
Future Proofing Your Portfolio
If you're investing for the long term, you have to be prepared for the future. That means positioning your apartment buildings to weather any economic storms — and being ready to leap on new opportunities that boost the value of your portfolio.
This isn't just keeping your properties up to date — though that's certainly a part. It's also ensuring your properties cater to your residents' needs even a decade from now without missing a beat.
Embrace Technological Innovation — Within Reason
I don't mean you need to invest in every single tech upgrade out there. Far from it. Proptech is a rapidly growing space, and that means it's also full of potential upgrades that could go out of date very quickly.
Need an example? Think back to the late 90s and early 2000s, when developers were adding landline phone jacks in nearly every unit. They thought it was the future — but it wasn't.
While it may be tempting to be an early adopter of every cutting-edge technology, it can be wise (and more financially prudent) to have a bit more patient.
Prioritize Sustainability
Not going to make a political statement of any kind, but renters are getting more and more serious about green living. Investing in energy effeciency and water conservation will ultimately save you money as well, so it's worth exploring.
Lower operational costs plus happier residents equals a healthier bottom line.
Adapt to Urban Living Trends
Trends sound…temporary, I know. Many are. Not all, though: Think about the rise of remote work in 2020. Sure, some folks are going back to the office in greater numbers, but we'll absolutely see sustained demand from renters for workspaces in or near their homes.
While the ideal solution may be to ensure each unit is large enough to support residents working from home, this could be expensive and require floorplan adjustments. That doesn't mean your apartment building is out of luck, though — think about ways to improve community amenities instead.
Have extra space in your lobby? Add a couple coworking desks in there. You can even charge a desk rental fee to boost your property's income. Your residents will appreciate having an accessible, dedicated workspace, and you'll appreciate the extra revenue.
Ensure Your Financing Supports a Long-Term Hold
Your operational costs are continuing to climb, whether we're talking about taxes, insurance, or labor. Make sure one of your largest costs — your debt service — is reined in. If you're looking to get a new loan or refinance, use us to shop your loan around to thousands of lenders to get the absolute best terms for your long-term success. (Try it out: Just put your details in the form below.)
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Our Previous Survey
Last time around, I asked about why you invest in apartments in the first place. You told me: The biggest reason had to do with the multitude of tax benefits available to multifamily investors. Read the analysis of last week's results.