Should you invest in Apartment Buildings during a Recession?

Yes! Historically Apartments are great investments no matter what part of the Economic Cycle we're in. That goes for Recessions as well. You have to understand how a recession affects the different apartment asset classes and the role of debt during this time.

What is a Recession?

Because a Recession runs simultaneously as Inflation, your purchasing power decreases. That means it'll cost more to buy a house, groceries, gas, and even go to outings like movies and similar activities. During a Recession, Supply and Demand are on the side of Multifamily Investors because of the increased demand for rentals, which raises rents, thus increasing the property's value.

Apartment Classes aren't all Impacted the same.

Luxury apartments or Class A apartments are hit the hardest during a Recession because their tenants tend to gravitate towards more affordable options such as Class B and C, which causes the rents to increase in these two apartment classes. If you can invest capital in Class B and C apartments now, you'll see greater Returns and Appreciation.

Role of Debt for this Recession.

I read earlier today that in a recent National Conference, leading commercial real estate experts suggested that the flow of capital into the Multifamily Industry would increase shortly, despite the economy heading into a recession. As you read, people who know what's going on are moving their money into Multifamily.

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