Why Apartments will be great investment post-pandemic

1. Taxes will increase after stimulus bills.
During the last two months, Congress has passed more than $4 trillion in stimulus spending, with more probably on the way. Taxpayers will end up paying for this at some point. Medicare, the health insurance program for seniors, could run short of money in 2023 or sooner, as the payroll taxes that finance the program plunge amid record unemployment. Also the future retirement benefits people receive might shrink.

Apartment investment is one great way to get long term tax free income and also help in offsetting your current income with the depreciation (Check with your CPA before taking tax decisions).

2. People will move from primary to secondary markets due to de-urbanization
In view of future pandemics, due to social distancing requirements, cost of living de-urbanization from the high population density might happen even though its too early to predict. If you see current number of covid infected cities, they all are high population density metros/ cities. 

3. Apartments fared better than other asset classes
As per latest article from NMHC (National Multifamily Housing Council) the rent collections for Apartments in April are at 92% by April 26th. So Apartments which come under basic necessities fared better than other asset classes like Retail, Hotel and office which suffered really bad.

4. Stock market will have long period of volatility and low returns
Top wall street forecasters predict that stock markets will deliver lackluster results because of prolonged volatility for a long time due to uncertainties.

5. Less people buying homes
Because of strict criteria by banks like 700 credit score and 20% downpayment recently by Chase and other banks it will be difficult for a lot of people to buy homes. People want to have mobility due to employment shifts. New single family home constructions will slow down and other macro trends will shift people mindset to rent more. The demand for Apartments will increase a lot in future.

6. All time Low Interest rate environment
Interest rates will be low for a foreseeable future which enables to get good cash flow from the apartment investments.

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Stay safe,
Rama Krishna
rama@zovest.com