Are you looking for the best multifamily market to invest in? In order to find the great investment markets, you’ll need to start with some basic research. Multifamily real estate should be a calculated investment combined with long-term vision.
Multifamily market neighborhoods and resident quality
In New York City, the Department of Consumer Affairs released a report on the ways neighborhoods influence residents’ financial health. It states, “One of the report’s most important findings is that grocery stores, financial service businesses, childcare, and affordable housing have a direct and significant impact, both positive and negative, on a neighborhood’s financial health.”
There needs to be a balance for a market to perform over the long-term. Neighborhood trends and resident quality directly reflect that balance.
So, how do you decide which geographic location has the best neighborhoods?
1. Steady employment growth
Look for a strong, growing market for employment. Companies and factories moving into an area is a good sign. Steady job growth will spur migration to the area and demand for multifamily real estate will increase. This will also have a positive impact on rental rate growth.
2. Well diversified employment
A high demand for workers increases an area’s desirability. Look for a market that has more than one industry tied to it’s prosperity.
A mix of offices, factories and cultural attractions will ensure that an area has diverse, sustainable employment options. Do your homework. Start with these multifamily market research resources.
3. Solid population growth
An increasing population in a target area is ideal. A decreasing or stagnant population trend is not favorable. Look at population growth trends for the past decade. It’s especially relevant to determine what factors are driving population growth. Are new people moving to the area?
A growing population might also mean that people with stable wages have begun to have families. Some great places to find detailed information are census.gov, bestplaces.net, City-Data.com, and JLL’s City Research Center.
4. Proximity to employment centers
Urban growth is thriving and people want to be able to walk, bike or have a short commute to work. The value of an easy journey to work cannot be over emphasized. Your prospective residents are looking for housing that is near their jobs.
5. Proximity to transportation
Good roads, train stations, bus lines and other mass transit are important to the growth of a community. Choose a multifamily market that is well situated along public transportation routes. Consider the walkability factor to bus routes and train stations. An isolated neighborhood is not favorable.
6. Low crime rate
Safety is also of paramount importance to renters. Young families will relocate and find multifamily properties that emphasize a safe environment. You can visit the local police station and get a premise history on specific properties within a multifamily market.
In addition, take a walk in the neighborhood. Look for vacant lots and buildings where crime might be conducted. Is there graffiti on buildings or trash in the streets? What is the overall quality of the street space?
7. Good schools
The quality of local childcare and schools are the determining factor for parents moving in or out of a neighborhood. Parents want their children attending above average schools. The end result is that the quality of a school means either long-term tenants or high turnover in your multifamily building.
8. Attractive, nearby retail
Convenient grocery stores, restaurants, and shops are important to a growing community. This is where community ties and daily family memories are made
A strong multifamily market will include a variety of retail shops and name brand chains. Access to basic shopping needs will determine the quality of your neighborhood.
Aesthetic beauty in and around the neighborhood also has an impact on the residents in the area and how they perceive the quality of their environment.
9. Cultural attractions and activities
Cultural attractions will draw not only local residents, but tourists from other communities as well. Museums, sports centers, arenas, parks, theaters, festivals and a range of restaurants are important to a market’s vitality and growth. Public access along transportation routes to these activities should be factored in.
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