US Multifamily Property Report

US Multifamily Property Report

Multifamily Rent Prices Rise Last 2 Months

Multifamily property investing has been a hot sector for many years now. If you’re hoping to earn more in property investing, this market might be a better choice.

With home prices expected to stay high, rents will grow, the rental market remains a solid choice for investment property buyers.  And if one rental property is good, then more “doors” could mean much greater ROI.

Rents are rising faster of recent even with lower occupancy and new construction arriving. The top reason? Rising incomes.

As an investor, you’ve got a chance to get into a market in quiet period and buy properties in the best cities. Property managers were dealing wth a flat period of revenues and slightly lower occupancy rates. The improving rents of late combined with strong employment numbers have to be some feel good news for everyone.

If you do invest, ensure you’re managing your portfolio with the right property management software. Efficient management is critical to investing success.

What’s Happening Right now in the Multifamily Markets?

It might depend on which city you’re in.  The stats below and our own report on rent prices in different cities might help you identify the best opportunities. The best cities for buying property are luring more of investor’s dollars. Overall, multifamily property investing is attractive due to rising rents, your ability to use financal leverage as well to conduct more efficient property management.

Rents Rising Fast of Late

According to a recent report published by Multifamily Executive, rents fell 20 basis points from March. However, rents across the US actually rose 2.4% April 2017 to April 2018.

The US national average rent increased by $4 to $1,377 last month and $10 the last two months. Occupancy rates fell slightly. Could this mean new construction is flattening the market, and prospective buyers such as Millennials are buying homes instead? How long will new construction continue to create a glut? Will construction slow by 2020 and rents rise again?

The report did suggest the flat results are due to a supply glut of condos. Each city has its own specific vacancy rates, construction rates, and rent price changes so the affordability and vacancy situations in the Miami, Los Angeles, San Francisco and Chicago multifamily markets for instance are all unique.

Generalized vacancy and price rates across the US might not be as relevant as in which cities you might be interested in.

The report also found that price gains where highest in Western markets such as Seattle, San Francisco, Denver, and San Jose. Orlando had the fastest price growth at 6.2% followed by Sacramento at 5.2%. Las Vegas, Tampa and Phoenix had growth rates above 4%.

Freddie Mac Multifamily 2018 Outlook

In its Multifamily 2018 Outlook report, Freddie Mac predicts that multifamily originations will set another record 2018, yet growth will slow from 2017. They suggest that rising interest rates through 2018 will cause capitalization rates to increase slightly, and will suppress property price growth and slow origination volume.

Freddie Mac’s report on renter’s profiles this spring stated that 67% of renters view renting as more affordable than owning a home, and that includes 73% of Baby Boomers. They said 67% of renters will keep renting for financial reasons—and that is up 8% from 2 years ago.

With unit numbers growing, rent prices slightly rising, cap rates rising, employment rates remaining high, multifamily property managers will need to do more to optimize revenue and profits for owners.

Please do share this report with your connections on Facebook and Linkedin.

 

If you’re considering buying multifamily properties, or you manage a property management company or you’re an HOA manager, take a good look at how you can manage more cost effectively with ManageCasa.

As you grow your portfolio of properties in the multifamily sector, you’ll need to automate and gain better control of your finances, tenant relations, and time management. ManageCasa is ideally suited to helping you acheive these goals. And it’s not just for SMB property management either.  ManageCasa’s simplicity is catching the attention of large scale multifamily property management companies for how it complements their current software.

Check out ManageCasa now.

 

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