When it comes to investing, real estate investing is very important for any investor. Many are now interested in multifamily investing.
Multifamily real estate investing has significantly attracted investors seeking stable returns and long-term wealth-building opportunities.
However, the returns on investment in multifamily investing are directly related to the city or location of the investor.
In this blog, we will highlight some of the top cities for multifamily investing.
What is Multifamily Investing?
Multifamily investing means buying multifamily properties to boost net operating income. Multifamily properties have multiple housing units on one property such as apartment complexes, duplexes, etc., where many families can live.
Factors Influencing Multifamily Investing
Before listing the best cities for multifamily investing, you must know the factors that influence multifamily real estate investments.
1. Population
Increasing population trends result in higher demands for housing and rental properties. If any city is experiencing constant population growth due to specific reasons like job opportunities, migration, and better educational and health facilities, it’s a good sign for investors.
2. Economic Stability
Cities having diverse economies and robust job markets can often experience a setback in the demands of rental properties. Job growth generates economic stability, and strong economic fundamentals result in improving tenant stability, reducing vacancy rates, and ensuring regular rental income for investors.
3. Developed Infrastructure
A city with a well-developed infrastructure, including transportation, roads, electricity, schools, and amenities, attracts more people. A developed infrastructure reflects the city’s growth and development and offers a better scope for investment to investors.
4. Real Estate Appreciation
Consider the historical and projected real estate appreciation rates if you are looking for long-term investing. Prioritize the cities with a history of property value appreciation and positive economic indicators for any multifamily real estate investment.
5. Regulatory Landscape
Investors must analyze the local regulatory atmosphere. Cities with landlord-friendly regulations and supportive legal proceedings assure a stable and predictable environment for investment.
Most Suitable Cities for Multifamily Investing
Below are the cities you should consider for multifamily real estate investment if you are looking for higher returns.
1. Salt Lake City in Utah
Salt Lake City has recently recorded a noticeable amount of multifamily investments. According to a report in November 2022, the average city rent was $1,614 in August, and the investment volume hit around $745 till then.
The trade, transportation, utilities, mining, and construction sectors have experienced employment gains. The economic stability in Salt Lake brings the most exciting opportunities for multifamily investing there.
2. Atlanta City in Georgia
Atlanta city has a high population and job growth rate. According to a study, Atlanta has experienced rapid employment growth in the education, health, construction, leisure, and financial sectors.
The suburban real estate market in Atlanta is safer for investing. Millennials and the new generation are not willing to buy homes. They prefer to opt for rent. So, multifamily investing seems promising there.
The diverse economy and the city’s affordability make it popular among real estate investors.
3. Orange County in California
Orange County is one of the most competitive regions for multifamily investing. According to a news agency there were around 6800 new multifamily units in process in 2022. With a wide range of neighborhoods, Orange County offers several attractive areas for investors.
The beautiful locations of coastline, harbors, and beaches, along with the amenities available, make it a hotspot for many people. Its growing job market is another reason behind the increasing population and rent rates there.
4. Charlotte in North Carolina
Charlotte, North Carolina, is emerging as a prominent hub for investment in multifamily real estate.
The employment rate has expanded in Charlotte in recent times. Various sectors, including leisure, hospitality, and finance, have announced new job opportunities.
As of November 2022, there were around 27000 multifamily units under construction. According to reports, by the end of 2022, the rent growth rate in Charlotte was higher than the national rate in the U.S.
So multifamily investing there in the long run will be profitable for the investors.
5. Austin in Texas
Austin has witnessed rapid population growth driven by a vibrant cultural scene and vibrant technology.
A large section of the young population prefers living in rented houses due to the high rates of owning a house in Austin. For investors, it is an attractive market to invest in multifamily real estate due to its pro-business environment and diverse job opportunities.
Initiate Your Multifamily Investing
Looking forward to multifamily investing? Choose the correct city after a thorough analysis of various factors. These include economic stability, demography, infrastructure development, regulatory environment, etc.
Above mentioned cities are just a few examples of promising locations for investors. Some other prominent cities are Durham in North Carolina, Houston in Texas, Nashville in Tennessee, Washington DC, and many more.
To achieve long-term success in multifamily investing, proper research, and diligence are essential. Need help with your real estate property management tech implementation? Talk to our Yardi consultants and MRI Software specialists today!