Multifamily properties are popular options for investors looking for ways to shift investments away from stocks and bonds while enjoying income generation and appreciation. The properties produce dependable income through rents, and since owners can increase rents over time, give investors the added benefit of income appreciation. Multifamily properties also have certain tax advantages, including deductions for interest expenses.
But multifamily properties not only benefit investors, they also serve a critical societal need, which is to provide housing for residents. America already has a housing shortage, and particularly in large cities, where the need for housing is much stronger and affordable housing inventory lower, multifamily properties are a convenient option for many residents.
It is this combination of financial benefits and rental demand that is pushing real estate investors into multifamily home construction. This interest is also driving competition, especially for quality tenants. Multifamily property developers now have to come up with innovate designs and systems to attract and maintain good tenants. Three ways they are doing this now are adopting mixed-use designs, incorporating smart technology, and offering in-demand amenities.
Mixed-use buildings feature both residential and commercial spaces. The commercial spaces are typically retail spaces found on the lower floors of a property, while residential spaces are above. While this design is common in urban areas, until recently it had not been adopted in multifamily construction projects in suburban areas. Today, however, developers are building multi-use properties with retail spaces in these areas. This enables suburban residents to enjoy access to shopping, entertainment, and fine dining experiences away from the commotion of the city.
Some developers are going further and setting up offices for service companies and co-working spaces in buildings to tap into the popularity of remote working arrangements. These co-working spaces feature high-speed Internet and conference rooms.
Smart technology is another emerging trend in multifamily building design. This increases convenience while enhancing security. For convenience, developers are prioritizing apps and devices that support controllability at home. For example, smart thermostats allow tenants to monitor and adjust residential temperatures from anywhere through their mobile phones. There are also apps that connect with home lighting systems so tenants can change the lighting from the comfort of their sofa, and sensor-equipped air conditioning units that can sense when tenants enter and leave, turning them on or off as required. Automated doors also use sensors to open and close without tenants having to touch door knobs.
For safety, technologies like doorbell cameras and IP video intercoms enable efficient visitor management. Technology can also support effective property management. For example, developers can create apps that enable tenants to reserve property amenities or alert management of home issues. Property managers can even use digital tools to provide virtual tours to prospective tenants.
Finally, with regard to amenities, multifamily developers today are providing premium amenities for tenants. These include valet parking, rooftop lounges, barbecue areas, and swimming pools. Other amenities developers are incorporating are on-site gyms, spas, bike storage rooms, and pet-friendly policies. Some developers are even prioritizing community-style living as part of their offerings. They have expanded common spaces to increase interactions among residents, and regularly organize resident events to build a sense of community.
