were definitely bullish on multifamily both in the short term and the long term diversyfunds alan lewis says rent growth is cooling and apartment landlords are feeling the heat especially those who will soon need to refinance debt they took on to buy buildings yet one company is still upbeat on the outlook for multifamily rentals particularly in the sun belt you have major supply constraints in most rental markets and the housing affordability crisis continues to result in an increasing pool of renters in most markets alan lewis cofounder and chief investment officer of diversyfund told marketwatch so were definitely bullish on multifamily both in the short term and the long term he added the company is particularly optimistic about rent growth in the sun belt and owns a number of properties in florida south carolina north carolina and texas diversyfund is a san diegobased realestate investing platform that allows people to invest in commercial real estate particularly in apartment buildings through investment funds the companys approach is similar to fundrise another realestate investing platform that is also bullish on the sun belt investors put in a minimum of 500 and get access to the companys realestate investment funds or reits the company charges a certain percentage in fees for asset management and and other services accredited investors who put down bigger sums have access to additional investment funds at fundrise the minimum initial investment is 10 and accredited investors also have access to more funds diversyfund which manages 12 multifamily properties said it had over 28000 investors on its platform lewis said the company targets properties that have existing tenants and aims to hold the property for around five years over which time it does renovation work to improve the building internally and externally ultimately increasing rents among multifamily investors some of the shine is wearing off the sector due to three shifts that are under way in the us economy one apartment investor lost four houston complexes to foreclosure recently the wall street journal reported due to a confluence of those factors the first factor is that some investors have been hurt by a drop in multifamily home values according to realestate analytics firm green street the value of apartment buildings has dropped by 21 in the last 12 months the second is the gloomy outlook for those who took on loans with a floating rate that need to be refinanced in the near future the company in the wall street journal report applesway investment group saw the interest rate on one of its properties go from 34 to 8 at least 25 billion in securitized mortgages backed by rental apartment buildings will expire in 2023 cred iq said in january thats over 2300 multifamily loans with new york city accounting for 9 of the debt diversyfund has several properties that are up for refinancing lewis said but because the company has multiple properties it is weighing the option of selling one to generate enough capital to refinance and restructure the expiring debt the beauty about having a fund is that you have multiple properties in one portfolio so it allows you to have some flexibility he said the third factor is that rent growth has slowed nationwide the latest inflation print showed that rental inflation is showing signs of abating but in the sun belt rent growth is still running hot lewis noted the median rent in miami was 1948 as of april 2023 according to apartment list and prices are up 56 year over year in raleigh nc rents are up 29 year over year and in charleston sc they are up 106 in contrast nationwide rents are only up 26 compared with last year lenders are more cautious now lewis noted and more conservative in their underwriting but investing in real estate is still a good bet he said real estate is tangible it enjoys a host of tax benefits for investors lewis said as rents go up if youre an apartment investor if youre the landlord then obviously you stand to benefit from that and unlike the us dollar he added you cant just print more real estate overnight also read rental properties come with risks  what to know before becoming a landlord and this woman went from living without electricity and running water to owning real estate worth 2 million heres how she did it andmy daughter owes her former landlord 5000 for water damage even though they ignored her requests to fix it what can she do this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal