Despite the gloomy news in the wake of the 1986 Tax Reform Act about apartments as tax shelters, rental units will once again become the favorite real estate investment in the nation, according to Michael L. Meyer of Kenneth Leventhal & Co.
Speaking at a San Diego multifamily housing conference sponsored by the Mortgage Bankers Assn. of America, the managing partner of the Newport Beach office of the consulting and accounting firm said that now is a good time to buy "good multifamily properties . . . because the current yields in the range of 8.5% to 9.5% compare favorably with alternative investment opportunities."
Meyer said that well-located apartment units in non-rent-controlled areas could result in a total yield to the equity owner of 15% to 20%, "a good buy in today's economy." Another benefit is the abundant supply of rental properties, largely because most rental properties available are in complexes of eight units or less.
"Currently there are more than 29 million rental units nationwide, located in every community in the country," he said.