Before We Dig In…
If you’ve been considering getting into multifamily investing, or if you’re already in the space but are still looking to streamline your approach, check out our guide to the best multifamily markets to invest in today. Here’s what you can expect:
- Discover the country’s hottest multifamily markets
- Learn what’s influencing their growth and popularity
- Learn what to consider if you want to get involved
- Explore tips on how to maximize your investment outcomes
Why Multifamily Investing is Growing in Popularity
Thanks to the dramatic rise of remote work, the desire for more living space, various communities’ rise in popularity, and other factors, multifamily investing has seen significant growth over the past two years. According to Redfin’s rental report, rents are up 14% year-over-year — one of the smallest increases since Q4 2021. Demand isn’t slowing down, either — the National Multifamily Housing Council noted that 4.3 million more apartments were needed by 2035 to meet existing demand. Key cities are seeing more growth than others, giving investors and GPs more opportunities for growth.
Here Are Just a Few of the Best Multifamily Markets
- Miami Metro Area
- YOY Rent Growth: 26.3%
- Est. Year-End Growth: 10.5%
- Orlando, Florida
- YOY Rent Growth: 24.8%
- Est. Year-End Growth: 8.9%
- Tampa, Florida
- YOY Rent Growth: 23.8%
- Est. Year-End Growth: 8.1%
- Las Vegas, Nevada
- YOY Rent Growth: 23.4%
- Est. Year-End Growth: 8.4%
- Phoenix, Arizona
- YOY Rent Growth: 23.2%
- Est. Year-End Growth: 7.7%
Get the full list with complete stats: Download our top multifamily investment markets guide now to see more top markets along with data on how they’re ranked.
Why Are These Markets Doing So Well for Multifamily Investing?
There are a number of reasons, but two of the most common revolve around employment: job creation and company expansions/relocations. On the job creation side, markets with companies that are winning the talent game are naturally seeing strong employment statistics. People are relocating there or are already living there and finding employment that doesn’t require them to move thanks to remote work. Additionally, companies are more empowered today than ever to explore other locations for their headquarters — whether it’s to be closer to a talent pool or to take advantage of tax benefits.
How to Make the Most Out of an Investment Opportunity
If you’re looking to break into multifamily investing, working in the best multifamily markets is a great way to start — provided that you consider meaningful statistics and make solid decisions. It can be easy to go too big too quickly or make a financial misstep early (and pay the price later). Here are a few things to keep in mind:
- Rent Growth — While these markets have seen significant upward trends, it’s important to look at any market’s rent growth over time. Sustained growth over longer periods is better than a short, recent growth spurt.
- Vacancy — You don’t want to invest in a market that has more vacancy than demand. Low vacancy rates indicate higher demand than existing supply.
- Income — Markets with stronger average income may indicate an opportunity to invest in better asset classes. Balance this with inflation and the consistent rise in wages over the past year to make the best decision.
If you decide to move forward and explore your investment opportunities in these markets, ensure you set yourself up for success. Historically, a great deal of the commercial real estate (CRE) function has been manual. If your goal is to grow your multifamily asset portfolio, the administrative headaches, costs, and wasted time will rapidly become overwhelming. Using a CRE investment management software solution will streamline a significant part of your work. Here’s how:
- Fundraising — It’s likely that you’ll need to fundraise to get the capital you need to see the transaction through. Managing this strategically and with the use of technology will help you target the right investors and manage fundraising seamlessly from start to finish. Learn more about using the right technology to streamline this part of the process.
- Banking — Investors have several bank accounts for different needs per asset. As you grow, creating, managing, and analyzing these accounts will consume more of your valuable time than it should. Centralizing all banking activity across your assets will help you more efficiently conduct transactions for a wide variety of purposes and give you greater oversight of each asset’s financial performance. Learn more about the importance of banking for CRE.
- Distributions — If you fundraise, you’ll have investors that expect returns on their investments in you and your assets. Distribution management is a renowned pain for CRE investors. Strongly consider solutions that enable you to automate this important process as opposed to dealing with manual files and processes. More on that here.
Go Deeper Into Multifamily Investing with Covercy
Remember to download your free copy of our guide to the best multifamily markets for even more insights and recommendations. When you’re ready, reach out to learn how our CRE investment management software solution will put you in a strong position to achieve your goals with multifamily investing.