Multifamily: A new investment model

In 1939, the concept of “multifamily” was created in the United States, referring to a property that is used for residential rental and consists of different spaces, usually including apartments of different sizes and shared common areas. The main tenants of these properties are usually young people, staying for a limited time, students, or small families. Here we tell you more about Multifamily, a new investment model.

What is the outlook for multifamily housing in Colombia?

In our country, rental housing is a growing trend, as it is the most widely used form of housing. According to the latest Quality of Life Survey by the National Administrative Department of Statistics (DANE), four out of ten households in the country live in rented accommodation.

For this reason, the Colombian Chamber of Construction (Camacol) is evaluating the multifamily model in order to meet the housing needs of those who do not want or are unable to become homeowners, seeking new alternatives in which renting plays a key role in meeting these needs.

On the other hand, tourism is also a potential market thanks to the high demand in the country. According to the Ministry of Commerce, Industry, and Tourism, during the seventh month of 2023, the country welcomed 494,607 travelers from abroad, a figure 12.6% higher than that recorded in the same period in 2022, a figure that tends to be on the rise.

Why invest in multifamily properties?

One of the main advantages of investing in multifamily properties is the generation of steady income through the leasing of spaces. This provides a recurring cash flow, which is attractive to investors seeking passive income.

In addition, properties tend to appreciate in value due to demand in the sector, improvements made to the property, and even improvements to the surrounding infrastructure.

Finally, the need for multifamily housing is usually constant, which means there is continuous demand for this type of property. This can make investments in multifamily less susceptible to economic fluctuations.

How does a multifamily project operate?

They are usually managed by companies with expertise in operating these new business models. These professionals help maintain control of the co-ownership, facilitating long-term asset value retention and generating lower management costs. They are also responsible for maintaining the project to prevent deterioration and the need for repairs after the homes are occupied.