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Multifamily Minute
Last updated on Jan 24, 2023
3 min read
by Jeff Hamann

Multifamily Minute Reader Reflections: The Best Approach for Investing in 2023

We surveyed our 40,000 subscribers to see if investing in upgrades or purchasing properties is the way to go this year.

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In this article:
  1. Survey Results
  2. Lack of Upgrades?
  3. 1. Value-Add Investments Are Riskier
  4. 2. You Can't Always Anticipate Major Expenses
  5. 3. Acquisitions Are More In Focus
  6. Sign Up for the Multifamily Minute
  7. Our Previous Survey
  8. Get Financing

In our Jan. 17 Multifamily Minute email, we asked our approximately 40,000 readers where they felt the best place to invest was for this year: whether by upgrading existing properties or by buying one or more apartment buildings.

Survey Results

Buying new apartment communities was the clear winner, with just shy of 75% of total responses. About a quarter said they were planning for no major acquisitions or expenditures. Interestingly — almost no one said they were planning to do renovation work as part of their multifamily investment strategy.

View the full table of results below.

Type of Investment

Percent of Respondents

Acquiring one or more properties

73%

Renovating units or common areas

3%

Replacing major parts of a building

0%

No major acquisitions/expenditures planned

24%

Lack of Upgrades?

As much as I'd love to talk about the large cohort of investors seeking new properties, I think it's more interesting to look at the area most of our respondents stayed far, far away from: major improvements and upgrades.

I believe there are a few reasons for this. Let's explore them all below.

1. Value-Add Investments Are Riskier

This one's true, broadly speaking, and most investors look to decrease their risk profile with an impending recession. Further, implementing some long-overdue improvements on a dated property may not always hit the investor as their particular investment strategy — to many, it's just how you should responsibly own and operate any apartment building.

2. You Can't Always Anticipate Major Expenses

It's not too surprising nobody said they were planning to replace a major part of a building in the survey. After all, if you have to replace a building's roof, you're going to do that — not first figure out if it's the best type of investment strategy for your property. Though, pro tip: It is. It's super challenging to rent units that don't have a roof.

3. Acquisitions Are More In Focus

Finally, many of our respondents aren't likely summarizing their multifamily investment strategies with a single choice. It's far more likely that every investor — especially those who own multiple assets — will tick all of the boxes above to varying degrees.

That said, acquiring a building is generally a far larger investment than renovating some common areas or replacing an HVAC system. It makes sense, then, that few would tick this box as their highest priority.

Really, that last one's on me. I should have let the survey take multiple answers.

Sign Up for the Multifamily Minute

Want to give your thoughts every week with our surveys? We'd love to hear from you. Sign up through the form below, and we'll send you the latest newsletter along with our weekly survey every week on Tuesday.

Our Previous Survey

In case you didn't see it, last week we asked our readers what types of markets they're targeting for investment this year. Read our analysis of the results.

In this article:
  1. Survey Results
  2. Lack of Upgrades?
  3. 1. Value-Add Investments Are Riskier
  4. 2. You Can't Always Anticipate Major Expenses
  5. 3. Acquisitions Are More In Focus
  6. Sign Up for the Multifamily Minute
  7. Our Previous Survey
  8. Get Financing

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