How to Find the Best Multifamily Investment Markets?

One of the most challenging aspects of getting started in multifamily investing is knowing where to focus on. With the market so hot, many investors are seeking deals in every nook and cranny of the real estate sector. However, just a wrong move will have you getting stuck with the wrong investment. 

Therefore, you need to be conversant with how the multifamily investment market works before proceeding. That takes us to the focus of this guide. Below, we’ll be having a look at the basic tips you need to find the best multifamily investment markets. So, stay tuned as we dig in!

What Makes a Market Great for Multifamily Investing?

The first thing to consider when finding the hottest multifamily investment markets in 2022 is to know the parameters that make a market great for multifamily investing. Let’s have a look at them below;

1.   Population Growth

As the year goes by, the population of the United States is expected to expand by one percent. Consider seeking better than average growth for your investment to genuinely pay off. 

The fact is that the national average will surpass investments in a market with much faster population growth. Demand for living space will rise in tandem with population and job growth, and as demand rises, so will the price and profit.

2.   Employment Growth 

The number of jobs created is a growing trend that may signal the multifamily market’s long-term viability. The safest and most secure investment you can make is in markets that surpass the national average. People often relocate and look for available rents in places where there are plenty of jobs.

3. Low Unemployment Rate 

Another hallmark of a thriving multifamily market is low unemployment. A market with a consistent job rate is essential for a successful multifamily venture. To begin, have a look at the current job counts in the area.

The areas with the highest percentage of national employment are potential growth areas for the market. In this case, you’ll have a better idea of which areas have a strong and broad-based economy with a diverse set of employers.

4.   Employment Diversification 

Assuming that the employment market is performing better than the national average, consider searching for industries that are contributing to the expansion. In most scenarios, Government, educational, and medical jobs make up the most stable job markets.

However, the private sector is where the money is. As a wise investor, it’d be best to seek out an area where employment is a mix of government and private sectors.

5.   Population Critical Mass

Building a robust multifamily market requires an area with a high population mass. Consistent growth and stability are provided by a large population. Markets with a stable population (at least 500,000 people) are already adept at enlisting the services of an efficient property manager, multifamily inventory, and a diverse employment base.

Though the figure is just an example, it’ll give you an idea of what a safe and stable market may become and what it could provide to investors looking for investments that are worth their money.

Top Cities for Multifamily Investing in 2022

Suppose you seek to find the best markets for multifamily investing in 2022, our guide on the best multifamily investment markets will be quite helpful. However, the following are hot real estate cities for successful multifamily investing:

1. Nashville

Nashville is Tennessee’s capital and the state’s most populous metropolis. The multifamily investment market in Nashville has improved over time. In Nashville, there’s more demand for housing than there is supply, and annual appreciation is at record highs.

Nashville’s outstanding real estate market is one of the reasons why it will be one of the best places for multifamily investment in 2022. The rating is based on major investment characteristics such as real estate market activity, property value growth, and the local economy’s strength.

2. Raleigh

Raleigh’s multifamily market, also known as the Triangle, has been relatively stable as positive net absorption and new supply attract investors to this top-performing region. This southern metropolis is North Carolina’s capital as well as the state’s second-largest city.

Raleigh is home to world-class technology and life science organizations, as well as artists who thrive on the region’s rich cultural background and one of the most delicious food scenes in the country. It’s also one of those foresighted cities that can strike a balance between business-friendly policies and good quality of life for individuals who live, work, and play here.

3. Phoenix

Phoenix, dubbed the Valley of the Sun, is Arizona’s capital and the state’s most populated metropolis. The desire for multifamily housing in Phoenix, which has a population of over 1.7 million people, is fueled by several factors, including a cheaper cost of living and an abundance of pleasant weather.

There are lots to do in Phoenix, and several entertainment hot spots to visit. All four major professional sports leagues are represented in the city, as are world-class dining resorts and dozens of museums and performing arts venues.

4. Austin

Austin is surrounded by lakes and rivers, including the Colorado River, in the Hill Country region of Central Texas. The city is the state capital and the country’s 11th most populous.

The outperformance of the local IT industry, the shift to remote employment, and relative affordability distinguish the Austin multifamily investment market. If you’re looking for the best multifamily investment markets currently, Austin certainly has an edge. 

Austin’s economy is on par with the rest of the country and is booming thanks to the presence of several high-tech corporations such as Apple, Amazon, and PayPal.

5. Tampa

Tampa is simply a great place to live and do business. The multifamily investment market here is strong, and numerous publications rank Tampa as one of the best places to be in the U.S. Thus, the rising price of homes in Tampa and across the state are pushing potential buyers into the real estate market.

There’s steady job growth being created by higher-paying professional and business services. In turn, these business expansions spur economic growth in Tampa which makes the demand for housing rise.

Wrapping it Up

There you have it! That completes everything you need to know about finding the best multifamily investment markets. Keep in mind that for a multifamily investment to thrive, it has to be conducted in places where the market trend is hot. Also, there are certain parameters, as stated above, that you need to consider while locating the best multifamily investment market in 2022.

With that in mind, you can proceed with your investment journey. For your convenience, consider collaborating with an experienced real estate professional to help you along the line.