What is Multifamily Real Estate?
Multifamily real estate refers to any residential property that contains more than one housing unit. Structures classified under this category can vary widely, from small duplexes, which consist of two separate living spaces within a single building, to large apartment complexes housing hundreds of units. These properties are primarily designed to house multiple families, each in their own separate living space, but under one roof or within one complex.
The affordability of single-family homes plays a crucial role in the increasing adoption of multifamily in various markets.
In markets where single-family homes are expensive or scarce, more people turn to multifamily housing, increasing demand for apartments. Additionally, trends like delayed homeownership among younger generations can boost the multifamily sector.
Types of Multifamily Properties
- Duplexes/Triplexes/Quadruplexes: These are buildings designed to accommodate two, three, or four families, respectively. Each family lives in a separate unit but shares common walls.
- Townhouses: Typically multi-floor units sharing one or two walls with adjacent properties but with separate entrances.
- Apartment Buildings/Complexes: Larger buildings or complexes consisting of multiple rental units. They can range from a few units in a single building to hundreds in multiple buildings.
Value Drivers for Multifamily Real Estate
The key value drivers for multifamily real estate are tied to housing dynamics such as:
- Location
- Occupancy Rates
- Physical Condition