Certified Apartment Portfolio Supervisor (CAPS) Practice Exam - Module 1

Why might investors be attracted to multifamily housing as an investment vehicle?

1. They typically offer lower yields

2. They can achieve high occupancy rates quickly

3. They require minimal market research

4. They are less affected by economic downturns

The correct answer is: They can achieve high occupancy rates quickly

Investors might be attracted to multifamily housing because these properties often achieve high occupancy rates quickly. This is particularly compelling for investors as it translates to a steady stream of rental income, which can provide a stable return on investment. The demand for rental housing generally remains robust, especially in urban areas where homeownership may be less attainable for certain demographics. A multifamily property can serve a diverse population, including families, young professionals, and students, which contributes to maintaining high occupancy levels. Additionally, multifamily properties often benefit from economies of scale; with multiple rental units in one location, the operating efficiencies can lead to reduced costs and improved profitability. Other options do present considerations for multifamily housing investment, such as the resilience of these properties during economic downturns, but the immediate appeal of quick occupancy rates is a key factor prompting investor interest.