Multifamily properties are great real estate investments. They provide steady cash flow, appreciate, and are always in demand. There will always be people that will prefer apartment living than having the hassles and responsibility that come with homeownership.
Most of us have heard the saying “location, location, location”. In real estate, location is what you are truly paying for. Take for example a single-family home in Glen Burnie, MD. You can purchase a lovely 3 bed, 2.5 baths, 2,088 square feet house for $360,000. Now move that same house to Bethesda, MD, and your price tag will be $759,000! It’s all about the location. When compared to Glen Burnie, Bethesda offers more in terms of proximity to the nation’s capital and excellent public and private education to name a few.
In multifamily, it is all about the “market, market, market”. It is very important to understand the market when looking at multifamily investment opportunities. Tell me more about the market! It all starts with the market!
There are several factors we consider when choosing the right market to find multifamily investment opportunities in. We like to see emerging markets.
Emerging markets are those that people are moving to (population growth), jobs are plentiful and being created (economic growth), and rents and property values are rising (more growth!). We also look at crime around the property since we want to provide safe housing to our tenants.
Uhaul published an article about migration trends in 2020. You can read that article here:
States like Texas, Florida, Tennessee, and Ohio are seeing a lot of those Uhaul trucks crossing their state lines. Within the state, you will find emerging markets such as Dallas and Knoxville.
If you see population declining, employers leaving town, and no talk about future development you have found yourself a declining market. Get back on that Uhaul truck and keep driving.