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Multifamily Properties: A Hidden Gem in Investments

Real Estate Investment Management Sem categoria

author

Carlos Balthazar Summ

post date

17/03/2023

reading time

3 minutes

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CIX Capital has been investing in the multifamily residential segment since 2018.
Want to know why? Keep reading to learn more!

What Are Multifamily Residences?

First, it’s important to understand the specifics of this type of investment. Multifamily properties are buildings designed to accommodate more than one family, such as apartment complexes, lofts, gated communities, and housing developments.

The primary feature of multifamily properties is their commercial purpose. Unlike traditional residential condominiums in Brazil, these buildings are typically constructed to generate rental income. They are owned by a single entity or investor and leased to various tenants.

This income-generating residential construction model is well-established internationally, making it an excellent option for those seeking alternative investments. The U.S. market is particularly robust, with numerous financial institutions exclusively dedicated to this sector. In Brazil, companies such as GreystarJFL RealtyYuca, and Charlie are prominent players in this space.

Types of Multifamily Propertiesmultifamily

The multifamily property market caters to a diverse audience based on regional demand. These properties are categorized into three main types of construction:

HIGH-RISE

Found primarily in large urban centers, high-rise properties range from buildings with five stories to towering skyscrapers.

MID-RISE

In smaller cities, mid-rise buildings are more popular and cater to the preferences of local tenants. These properties typically range from five to ten stories.

GARDEN STYLE ou SUBURBAN

In suburban areas across the U.S., residential clusters cater to a broad demographic, from lower to upper-class tenants. Multifamily properties in these locations are generally low-rise buildings with three to four stories.

What to Consider Before Investing in This Segment

Investing in income-generating multifamily properties requires careful evaluation, whether you’re a beginner or an experienced investor. Collaborating with an investment advisor, financial planner, or securities consultant is crucial. Here are key indicators to consider:

1. Return on Investment (ROI)

The first step is understanding whether the expected ROI aligns with your short- or long-term goals. The profitability of an investment reflects variations in distributions and serves as a starting point for selecting the best option. Higher returns often come with higher risks, so it’s essential to assess the risk-return profile of the opportunity before making a decision.

2. Location

The location of the property is a critical factor in evaluating real estate investments. Thanks to market globalization and digitalization, you can now invest in properties anywhere in the world, not just in your city. Conduct thorough research on the real estate market to understand regional nuances. Alternatively, simplify your process by exploring the portfolios of established companies specializing in this type of investment.

Partnering with experts not only streamlines the investment process but also enhances its security. These companies continuously conduct market research to identify the best locations and work with trusted partners for each project.
Multifamily properties offer a robust, reliable investment option with significant potential for steady returns. By carefully evaluating the ROI, understanding market trends, and partnering with experienced professionals, you can unlock the full potential of this growing segment.

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    CIX Capital is an investment by Maiz: maiz.com.br