Residential real estate is hot commodity for investors

investmentnews.com:

With real estate ebbing and flowing on all fronts over the past several months, just how viable is it for advisors to consider the sector as part of their allocation arsenal?

Paul Feinstein, CEO and founder of Audent Global Asset Management, says multifamily housing and hospitality are the types of real estate that investors should be focusing on.   

While there’s a tremendous amount of opportunity in commercial real estate, Feinstein says that it’s a challenging area that entails a lot of risk, given the uncertainty about the extent to which employees will make their way back to office spaces.

“Is it going to be some type of hybrid model where people are working two, three days in the office and then working at home for the remainder [of the week]? That’s obviously going to have an impact and effect on rates,” he said.

Compared to the commercial real estate space, Feinstein says residential real estate in multifamily settings lends itself to a much more predictable cash flow.

“You can underwrite it much more consistently and with a little bit more predictability,” he added. “As a fixed-income replacement, it really lends itself for that asset class.”

The primary reason advisors have been considering residential real estate more recently, Feinstein says, is because fixed-income investments haven’t been yielding much in recent years.

“Advisors have been looking for other areas to park some money for some time and real estate’s a natural lateral move,” he says. “When you look at the multifamily space, student housing, senior living, those are kind of the hot areas. [They’re] much more consistent and predictable than other forms of real estate, especially commercial. I think advisors have been a lot more constrained in the