Don’t expect a slowdown in the multifamily sector anytime soon; multifamily investing is holding strong. Even though the homeownership rate rose in 2017 for the first time in 13 years, at 64.2%, it remains below the long-term average of around 65%. Millennial married buyers are getting major credit for nudging the rate higher.
But there’s no need for multifamily property investors to panic. Renting remains highly popular among single young professionals who want the convenience of urban living for its proximity not only to work but also to dining, nightlife and other cultural amenities. Plus, renting is less a burden on those who find a geographic move is a necessary part of career advancement. Further, baby boomers and empty nesters are increasingly opting for the simplicity of renting, particularly in light of coming tax changes that will reduce the advantages of home ownership.
According to Freddie Mac, the multifamily market moderated but remained strong in 2017 and should continue through 2018.
Freddie Mac is predicting multifamily originations will set another record this year, although the growth rate may be slower.
“Rising interest rates through 2018 will cause capitalization rates to increase slightly, which will put downward pressure on property price growth and slow origination volume,” Freddie Mac’s Multifamily 2018 Outlook says. “But strong economic growth and multifamily fundamentals will continue to create investor demand for multifamily investments.”
Where are the best markets for multifamily investing?
• A recent article in Multi Housing News identifies these three picks from Independence Realty Trust: Raleigh-Durham, N.C.; Columbus, Ohio; and Louisville, Ky.
• A blogger tells Rental Housing Journal he likes Houston, San Antonio and Dallas, Texas; Atlanta, Ga.; and areas of North Carolina and South Carolina, among a few other sites, for investing in apartments.
Launch an online search of “best places to invest in multifamily” and you’ll find even more possibilities.
The point is, lots of investors and organizations have varying places in mind – but based on what?
Look for objective research
At Platinum Commercial Holdings, our experienced team uses state-of-the art processes and tools to provide comprehensive analysis of your project. That includes evaluating such factors as zoning, taxes, crime rates, future developing or changing infrastructure, security/safety, direction of other corporate expansion and competition coming into the marketplace, among other factors.
We make sure you have all the information you need in making your high-level decisions about whether to move into a particular market, and how and when.
We are meticulous in our research and analysis and take no shortcuts in our due diligence for you.
We use the “emerging market method” to gauge the viability of different areas, taking into account population and employment trends, path of progress and other factors. We also can ascertain at which point of the predictable economic cycle a market sits and therefore the best time for entry and exit in a particular real estate sector.
The next time you’re lured into an article proclaiming “the best places to invest,” look carefully at the author and consider whether there is any bias involved.
We guarantee that at Platinum Commercial Holdings, you’ll get an objective, honest and comprehensive study that is tailored to you.