Older multifamily properties can look attractive on paper.
Lower purchase prices, value-add potential, and opportunities to improve rents have made them a popular strategy for investors for years.
But in today’s market, there’s another side of the equation investors need to consider.
Recent commercial real estate data shows that the median age of multifamily properties being sold is increasing, while investors are becoming more selective about property quality.
So, What Should Investors Look At?
The purchase price is only the beginning.
Older properties can come with larger capital needs, including roofing, plumbing, electrical systems, HVAC, windows, and other major improvements.
Insurance is becoming another factor. Insurers are paying closer attention to aging infrastructure, deferred maintenance, and whether owners have clear plans for major building upgrades.
That means a property that looks inexpensive upfront can become much more expensive once the true cost of ownership is considered.
Krystle’s Take
Here’s what I think investors need to remember:
Older doesn’t automatically mean better value.
There are still great value-add opportunities in older multifamily. But the numbers need to account for more than the acquisition price and potential rent growth.
Before buying, understand the property’s condition, upcoming capital expenditures, operating costs, and what financing will look like after all of those expenses are considered.
Sometimes the better investment isn’t the cheapest property. It’s the one with fewer surprises.
The Bottom Line
Older multifamily can still create strong opportunities, but due diligence matters more than ever.
Know what you’re buying, understand what the property will need, and make sure your financing leaves enough flexibility for the improvements that may come with it.
Every deal is different. If you’re evaluating a multifamily acquisition, let’s look at the full picture and find a financing strategy that makes sense.