Investing in Apartments? Here are the Top 10 Multifamily Markets You Should Consider

Commercial multifamily investment is one of the safest ways to diversify your portfolio risk. With an ever expanding market and increasing demand, multifamily assets provide stable returns that promote equity growth and tax savings. Choosing the right market for multifamily investment is therefore essential. While most of the multifamily markets offer premium returns, some markets are better than the others. Here are the top 10 multifamily markets that you should consider when investing in property:

1.    Oakland, California

Roughly 14% of Oakland’s population comprises of 25-34 year olds (echo boomers). With the increase in purchasing power, the occupancy rate in Oakland has crossed 97.1% and as San Francisco is becoming increasingly expensive, relocation to Oakland has increased. This is expected to raise the market value of multifamily investments, leading to a tenfold increase in return. If you haven’t invested in Oakland apartments, start now!

 Real estate investments, Real estate investing, cash-flow, Apartment investing

2.   Portland, Oregon

At the end of 2013, landlords in Portland were able to increase rent such that the occupancy rate crossed over 96%. With its stringent planning and continuous inflow of workforce (particularly youth), the demand for multifamily property in Portland exceeds supply.      This provides lucrative returns for commercial multinational investment.

 Real estate investments, Real estate investing, cash-flow, Apartment investing

3.   San Francisco, California

Attracting well-educated residents worldwide and providing high-paying employment opportunities, the City by the Bay has the lowest unemployment rate. Single and multifamily housing demand is, consequently, high. Economists predict substantial rent growth for the next fiscal year.

 Real estate investments, Real estate investing, cash-flow, Apartment investing

4.    San Jose, California

Closely competing with San Francisco, San Jose’s famous Silicon Valley attracts tech gurus and IT professionals globally. Portfolio allocation is made possible by a 45% rent growth during the quarter 2009-2013, which led to an exponential increase in multifamily returns.

 Real estate investments, Real estate investing, cash-flow, Apartment investing

5.    Miami, Florida

One of the first cities to recover from the residential condo burst, the apartment quarters in Miami have a 97% occupancy rate. Further development of high rise residential apartments is expected in 2014, increasing ROI.

 Real estate investments, Real estate investing, cash-flow, Apartment investing

6.    Houston, Texas

Houston’s housing market is continuously growing. Multifamily developers are delivering approximately 1400 units annually. In the past two years, over 200,000 jobs and 13,000 family units have been created. Average rent has increased in accordance with property demand.

 Real estate investments, Real estate investing, cash-flow, Apartment investing

7.    Denver, Colorado

Reporting the highest rent growth (at 7%) during the fiscal year 2013, Denver has been the “golden sparrow” by multifamily unit developers. Job growth and migration rate is paving way for further investment in residential apartment sector. With the demand of 17000 multifamily units exceeding supply of merely 5000 units, your investment is bound to yield high results.

 Real estate investments, Real estate investing, cash-flow, Apartment investing

8.    Seattle, Washington

Seattle has the strongest apartments demand in the West Coast. 38000 new multifamily units are expected to be created over the next 5 years to accommodate over 40,000 new jobs to be created.

 Real estate investments, Real estate investing, cash-flow, Apartment investing

9.    Orange County, California

Apartment demand is robust in Orange County due economic growth, household income and rising cost of home ownership. It is predicted that 6300 new apartment units are to be developed, growing inventory by 2.7% in 2015. Increase in multifamily investment returns is expected.

 Real estate investing, Real estate investment, cash-flow, Apartment investing

10. San Diego, California

The average rent increased by 3.6% in 2013. This allowed landlords to increase rent and reduce lease-term to maximize their returns. A similar pattern was observed in 2014 and is expected to be observed throughout 2015 and 2016.

 Real estate investments, Real estate investing, cash-flow, Apartment investing
 To learn more on which city to invest in and how to maximize your risk-adjusted returns with the help of competent multifamily asset managers, feel free to contact us.