America is Running out of Apartments

An Opportunity for Investors

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“Is this still a good time to invest in real estate?” It’s a question that I get asked often. The concern is that people have seen real estate prices appreciate considerably over the last several years — especially in places like New York, Seattle, LA, San Francisco and the entire Bay Area for that matter. However in many, many parts of the country real estate prices have not seen such increases. Think Provo (UT), Colorado Springs, Mesa and many others.

However, for investors, the most important factor to understand is that the US is facing a significant shortage in housing — specifically in rental units. It’s a basic matter of supply and demand. At the core of the issue is that we are in the early stages of a major shift in US housing — away from home ownership and towards renting. There a many drivers behind this trend, including lack of adequate construction during and directly following the financial crisis, increased student debt burdens, and stricter lending requirements for home buyers. And then there is what I call the Uber-effect. Many Americans, especially younger adults, don’t feel home ownership is that important any more [1]. And that in today’s world where workers are likely to switch jobs every few years, the restrictions of homeownership no longer make sense. This cultural shift further intensifies the apartment shortage situation. What’s more, this is not going to change anytime soon. Many predict decades of under-supply, particularly in workforce housing.[2] This is why OpenPath continues to see attractive opportunities for investors to passively invest in large apartment complexes.

[1] For more see America is Running Out of Apartments — BuisnessInsider

[2] For more see The Perfect Investment — Paul Moore

About me: I am a partner with OpenPath Investments, a social impact real estate company. We 12 years we have worked with investors, sponsoring the acquisition of 25 large apartment complexes in inventory constrained metros. Upon acquisition, we add value to our properties via light renovations, better management, and our unique community building initiatives. All which contribute to better living conditions for our residents, better outcomes for the environment, stronger economic performance and attractive returns for our investors.

A couple other posts I’ve written and I think you will like:

“My Next Google: A perspective from employee 75

“What Most Investors Miss”

Investor, Partner, Advisor. First Google Advertising Exec (2000–07), ex-Chicagoan. Now at OpenPath Investments & FullCycle Climate Partners

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