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Concepts

October 16, 2018

3 min read

Navigating the Waves: The Four Phases of the Multifamily Real Estate Cycle

Every investor knows that markets ebb and flow, and real estate...

  1. Recovery: The Recovery phase follows a market downturn. Vacancies start decreasing, but rents remain stagnant. It's a period of slow improvement, with reduced construction activity. This phase often presents excellent buying opportunities, as property prices are generally low.
  2. Expansion: As the market picks up steam, we enter the Expansion phase. New constructions increase to meet growing demand, rents rise, and vacancies decrease. This phase sees robust activity in the market, with higher property prices but also potential for significant appreciation.
  3. Hyper Supply: In the Hyper Supply phase, the market begins to become oversaturated. Construction activity outpaces demand, leading to increasing vacancies and stabilizing rents. Discerning investors will begin to adopt a more cautious approach in this phase, preparing for the potential downturn ahead.
  4. Recession: Finally, the Recession phase sees a significant slowdown. High vacancies and declining rents become more prevalent, and construction activity slows dramatically. It's a challenging phase, but for the savvy investor, it can also signify the upcoming recovery phase and potential buying opportunities.

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February 14, 2018

4 min read

Real Estate Valuation: Cap Rate and Return on Cost Decoded

While they both provide valuable insights, their application...

As we continue to explore the fascinating realm of real estate investing, we shift our focus today to two crucial metrics used in assessing the value and profitability of real estate investments - Cap Rate and Return on Cost. While they both provide valuable insights, their application and significance can be quite different. Let's untangle these terms and understand how to use them effectively.

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