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Best Multifamily Markets for 2023

Hey there! So, here's the deal: markets change, cities rise and fall, and what's hot today might not be tomorrow. That's why I'm here to give you the lowdown on the best multifamily markets out there right now. These are the places where we're putting our money, and where you should consider putting yours too.

What Makes a Market "Good" for Multifamily Investing?

Now, before we dive into my top picks, let's talk about what makes a market "good" for multifamily investing. It's not just a wild guess; there are some key factors to consider.

  1. Population growth: First off, population growth is a big one. After all, investing in multifamily real estate is all about where people live. If a market is attracting more residents than it's losing, that's a good sign. It means there's a growing demand for rental properties, especially in urban areas. A booming population also means more people in the workforce, which increases the need for affordable housing.
  2. Job growth: Job growth is closely tied to population growth. When a market sees an increase in jobs, more people move there to take advantage of the opportunities. This, in turn, leads to higher demand for rental properties, resulting in higher rents and lower vacancy rates.
  3. Low vacancy rates: Speaking of vacancy rates, low ones are a good indicator of a strong market. When there's a high demand for rental properties and not enough supply to meet it, vacancy rates remain low. On the flip side, if a market gets overbuilt and has more housing than needed, vacancies go up, and prices go down.
  4. High rental rates: High rental rates are a positive sign for investors. They show that the market can support higher rents, which means potentially higher returns on investment. However, it's important that the market isn't overbuilt, as an oversupply of housing can put downward pressure on rents.
  5. Landlord-friendly laws: Next up, we have landlord-friendly laws. Some markets have regulations that favor landlords over tenants, making it easier to manage properties and deal with any problematic tenants. Landlord-friendly laws include favorable eviction processes and laws that protect landlords' rights.
  6. Lower property taxes: Lower property taxes also make a market more appealing for landlords. When property taxes are lower, it increases profitability for property owners and makes it more enticing to invest in rental properties.
  7. Favorable regulatory environment: A favorable regulatory environment can make a market more attractive for multifamily real estate investors. Laws that provide tax incentives or other benefits to investors can boost profitability and make investing in rental properties more worthwhile.
  8. Strong economic fundamentals: Strong economic fundamentals are crucial for a healthy rental market. A strong economy, low unemployment rates, and high consumer confidence contribute to a thriving rental market. It's also important to look for a diverse economy to mitigate the risk of relying on a single industry or employer.
  9. Low crime rates: Last but not least, low crime rates are essential. Properties located in areas with low crime rates are more appealing to renters, resulting in lower vacancy rates and higher rents.

Best Multifamily Markets for 2023

Now that we're clear on what makes a market great for multifamily investing, let's dive into the best multifamily markets for 2023. Drumroll, please!

Atlanta, GA

Atlanta is booming with a 50% growth rate over the past 20 years. The economic base is strong and diverse, with finance, tech, and healthcare leading the way. Big names like Apple, Alphabet, and Microsoft are setting up shop there, attracting young professionals eager to live in urban centers. With rising rents and a comparatively affordable cost of living, Atlanta is a no-brainer.

Charlotte, NC

Charlotte is actively incentivizing companies to move there, resulting in a surge of job growth. It offers numerous incentives for multifamily real estate developers, including tax incentives and fast-track permit approvals. With high rental rates, low vacancy rates, and a landlord-friendly environment, Charlotte is a winner.

Austin, TX

Despite being on the radar for years, Austin continues to experience explosive growth. It attracts major companies like Tesla and Amazon, contributing to a strong job market. With a cool vibe, plenty of outdoor areas, and a high quality of life, Austin remains highly desirable. While property taxes are higher, Texas is one of the most landlord-friendly states.

Houston, TX

Often overshadowed by Austin, Houston shouldn't be underestimated. It's the fourth-largest city in the US and boasts a diverse economy beyond oil and gas. With a thriving port, leading aerospace industry, and strong healthcare and biomedical sectors, Houston offers great opportunities for multifamily investors. Low property taxes and a favorable regulatory environment are added advantages.

Columbia, SC

Don't overlook Columbia just because it's not making headlines. As the capital of South Carolina, it enjoys a stable and diverse economy driven by industries like government, healthcare, and education. Property values steadily increase with the growing population, and low vacancy rates make it a promising market. South Carolina's low property taxes and landlord-friendly laws are definite perks.

Las Vegas, NV

Las Vegas has grown exponentially and now offers a more diverse economy beyond entertainment and tourism. Healthcare, finance, and tech companies are starting to thrive there, creating a strong rental market. With landlord-friendly laws and steady growth, Las Vegas is a winner with room to grow.

Orlando, FL

Apart from being the home of Disney, Orlando has some of the most landlord-friendly laws in the country. The city enjoys excellent weather, a high quality of life, and a diversified economy driven by healthcare and technology. With a young population and its central location in Florida, Orlando is an attractive destination for young professionals, ensuring a steady rental market.

Conclusion

Remember, a good market doesn't guarantee a successful investment. The specific deal's fundamentals are crucial. However, these markets offer excellent probabilities for success in 2023. Stay tuned for more updates from us!

So there you have it, folks! These are the best multifamily markets right now. Remember, markets change, so keep an eye out for new opportunities. Happy investing!