Enjoy this discussion with some local investors and one from southern CA with 12 years of experience investing in multi-family projects.

In this discussion, we talk about why apartment buildings are a more stable investment over time that produce higher yields than the stock market.
Topics we discussed:

1. Dependable Income stream

• Regular and dependable income stream (mailbox money)
• Higher than typical stock dividend yields
• Stocks are volatile and uncertain.
• Apartments have much greater ROI over time.
• The lifetime of the investment will always be safer than stocks.

2. Reduced Debt by Property Income

• The NOI reduces debt
• NOI = gross income less all expenses before debt.
• Reducing debt creates equity over time.

3. Tax Benefits

•  US Tax code is written to incentivize real estate investors.
• Depreciation accelerations shield some of the cash flow
• 1031 exchanges – defer all taxable gains into the future.

4. Appreciation of Asset Value

• Excellent appreciation in value that exceeds other investment types.
• Value increases when rents go up
• Value add opportunities by improving the asset

5. Grow Portfolios Quickly

• 20 unit apartment building vs. 20 rental houses
• Managing / purchasing 50 unit building is similar to 200 unit building
• Property management benefits vs. managing
• Produce more income from apartment buildings because of efficiencies.