Ron Cadman: What to Expect from the Multifamily Market

You’re on the prowl for a potentially lucrative area of the real estate market in Alberta, Canada, but you’ve come to a standstill. Times are changing, and you’re wondering how you can make the most of the current market -- a market filled with groups of people from multiple generations looking for homes. In light of the current market situation, the multifamily market may be a wise area to zero in on, according to Ron Cadman of Investar USA.

Multifamily housing has been one of the top property market segments for decades. In fact, both institutional and private investors are especially active in this investment class. Part of the reason for this is that multifamily housing appeals to millennials, which make up the biggest generation in Canada. Millennials are turning to multifamily housing because they are generally having trouble securing home loans due to their large student debt and high cost of housing. In addition, they embrace the convenience that comes with living near their workplaces.

At the same time, many baby boomers are choosing multifamily housing due to its proximity to amenities and the lock and leave aspect. As well, multifamily living can be more cost effective as far as dealing with home maintenance, taxes, insurance costs are concerned.

Of course, even though multifamily housing can be a lucrative segment of the real estate market, you should still approach this segment with caution for a couple of reasons. For starters, rent prices are on the rise. Therefore, even though the market of multifamily properties has expanded during the past decade, this market may begin pulling back if rents continue to climb.

Also, in the years ahead, the growth taking place in this market may be more moderate due to economic uncertainty. When the economy is volatile, lenders tend to be more restrictive, so the competition for commercial property capital could intensify. Carefully looking at this market segment can help you to make a wise decision regarding investing in it in the short and long terms.

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