At Think Architecture we’re focused on bringing you the best in architecture from the latest design trends to our newest developments. Lately, we’ve noticed an influx in the number of multi-family housing developments around the country. There’s no question that single-family homes remain one of the major spotlights in real estate investments and construction trends. However, as housing prices rise, millennials are turning to multi-family homes for a low-cost alternative. This change in focus is leading to a switch in real estate trends throughout the country. But why are multi-family housing units causing such an upheaval in the architecture industry and how can you take advantage? We discuss all your multi-family housing questions below along with the basics and more in-depth strategies we’ve learned over the years.
What is Multi-family Housing?
Multi-family properties are a type of residential housing with two or more units under one roof or several buildings within one complex. They are generally comprised of a variety of configurations, with the most common being duplexes, townhouses, and condos. Each unit tends to have its own living space, kitchen and bathroom. Although the definition differs from situation to situation, a multi-family property will generally consist of owning a combination of the property and the land on one recorded deed. These buildings can be owned by one person who rents out different units or each unit is individually owned.
When Did Multi-family Homes Become Popular?
Forbes reported in 2016 that the rise of multi-family construction was up 38 percent. Although it wasn’t too surprising with the real estate collapse of 2008, the trend has only increased since then. Many up-and-coming buyers are choosing multi-family homes rather than single-family homes for their location and lower-cost. This is especially true in cities experiencing a surge in housing market prices including locations such as Seattle, New York City, Boston, and Los Angeles.
While the market in Utah isn’t as highly-priced as these cities, the amount of young adults flooding to the area is on the rise. From the silicon slopes of Lehi to the growing market in Salt Lake City, millennials often prefer the ease of multi-family units to the overwhelming upkeep and cost of other alternatives. As the rise in the number of young adults rises in the state, we can expect that the number turning to multi-family housing will as well.
What are the Benefits of Investing in Multi-family Housing?
Deciding where to invest is challenging. However, many investors will tell you that investing in multi-family properties is one of the most powerful strategies you can use to create a monthly cash flow. Not only is it a great source of monthly income but also offers the slow and steady appreciation many investors gravitate towards when investing in real estate. As an investor, the benefits of investing in a multi-family property include:
- Larger cash flow than single-family properties.
- Multiple properties in one place make management easier.
- Appreciation is generally better than single-family housing investments.
- Investors are afforded significant tax breaks when investing in multi-family properties. Read more about these tax breaks on the Two Bridges Asset Management blog.
- As real estate affordability decreases (as it has the past few years), more people will turn to multi-family homes.
- Investing in multi-family units spreads your risk over more units rather than only a few.
- Multi-family investments epitomize scalability and grow your real estate investment portfolio ten-fold just check out how this investor did on Cash Flow Diary.
What are the Latest Multi-family Home Architectural Trends?
Since multi-family properties are beginning construction every day, new and competitive designs are coming to life. As architects that specialize in multi-family properties here are a few of the latest trends we’ve seen come to life over the past few years.
- Multi-Use Common Areas
- Premium Hardwood floors
- Designer Furniture
- Yoga Studios
- Deluxe Workout Areas
- Infinity Pools
- Sustainable Upgrades including Solar Panels and Energy-Efficient Windows
- High-Speed Internet and Fiber Optics in Common Areas
- Modern Designs
- Pet parks and Pet wash stations
- Bike storage with bike maintenance shops
- Ski storage
- Smart home technologies such as smart locks, thermostats and lighting
Do Multi-family Developments Offer Affordable Housing?
Affordable housing options vary from development to development. However, many developers provide affordable housing options in their multi-family homes. This is mainly due to the tax credits awarded when offering affordable housing. For the most part, developers go into a project thinking about what’s reasonable and how they can help their investors get the best bang for their buck. Many times, this means mixing the development with market-rate and affordable housing options.
Have more questions about multi-family housing? Learn more by contacting our experts.