Affordability Driven Rental Rates
Although the Multi-family, Value-Add, and Development markets have seen tremendous growth over the past 5 years, most markets are experiencing an oversupply of high-end rental stock relative to demand. Evidence strongly suggests this demand is diminishing. Young professionals are increasingly burdened by student loan costs, stagnant wages, and higher rental prices, while at the same time, the gig economy (think Uber and Amazon) continues to grow further exacerbating the affordability crisis.
We therefore purchase with the following:
- Multi-Family – Our ideal asset is a take-over from an overly speculative Value-Add team, where we will reduce rents initially to increase occupancy and provide value relative to other nearby assets. Once the asset is stabilized, we move forward with the implementation of operational efficiencies.
- Tenant-Owned Manufactured Housing Communities – These are not the “trailer parks” of the 1970s; we buy manufactured housing communities of substantial quality. See below for an owned asset where the MHC owner can pay the mortgage, land rent (to us), and utilities for under $1,000/mo in a market where the average rent is above $1,200/mo and a new home is above $200,000. As affordability issues grow, we can provide the tenant owners with incredible value.