Top 10 Markets for Multifamily Real Estate Returns
As we continue to navigate through these recent economic changes, there’s been a multitude of speculation on what the impact will be on real estate investing. Granted, being a multifamily syndicator and investor myself, I am biased; yet, when it comes to real estate investing, multifamily continues to live up to its reputation of being one of the historically safest and most reliable asset classes there is.
According to the Newmark Knight Frank 1Q2020 US Multifamily Capital Markets Report, multifamily total returns averaged 5.10% in the last year. The key to capitalizing on this is selecting the strongest and highest performing markets. I personally focus on opportunities in Texas, Florida, and Georgia, where average returns can commonly range from 7%-9% or more. When a strategy for maximizing returns is effectively implemented, a multifamily investment can prove profitable even through economic shifts, as we are seeing in our current portfolio.
Which markets are leading the charge? Here are the top 10 markets in the last 12 months for returns on multifamily investments:
10. Seattle, WA
Overall Population: 637,850
Annual Total Return: 6.02%
Average 2 BR Rent: $1,690
Mean Income: $67,365
9. Palm Beach, FL
Overall Population: 8,344
Annual Total Return: 6.04%
Average 2 BR Rent: $1,418
Mean Income: $105,700
8. Minneapolis, MN
Overall Population: 394424
Annual Total Return: 6.70%
Average 2 BR Rent: $1,150
Mean Income: $50,767
7. Atlanta, GA
Overall Population: 440,641
Annual Total Return: 6.80%
Average 2 BR Rent: $1,190
Mean Income: $46,439
6. Denver, CO
Overall Population: 633,777
Annual Total Return: 7.73%
Average 2 BR Rent: $1,350
Mean Income: $51,800
5. Charlotte, NC
Overall Population: 774,807
Annual Total Return: 8.07%
Average 2 BR Rent: $1,140
Mean Income: $53,274
4. Tampa, FL
Overall Population: 348,934
Annual Total Return: 8.24%
Average 2 BR Rent: $1,280 Mean Income: $43,740
3. Orlando, FL
Overall Population: 250,224
Annual Total Return: 8.54%
Average 2 BR Rent: $1,280
Mean Income: $41,901
2. Austin, TX
Overall Population: $864,218
Annual Total Return: 8.69%
Average 2 BR Rent: $1,461
Mean Income: $55,216
1. Phoenix, AZ
Overall Population: 1,490,758
Annual Total Return: 13.73%
Average 2 BR Rent: $1,100
Mean Income: $46,881
Sources:
Newmark Knight Frank 1Q2020 US Multifamily Capital Markets Report
https://www.apartmentlist.com/
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About the Author
Ellie is the founder of Blue Lake Capital, a real estate company specialized in multifamily investing throughout the United States. At Blue Lake Capital, Ellie helps investors grow their wealth and achieve double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.
Ellie is the host of REady2Scale , a podcast that focuses on the "APS" of real estate: Asset, Process, and Strategy. Each episode discusses how investors can scale their real estate portfolio and/or businesses.
She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.
Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can read more about Blue Lake Capital at www.bluelake-capital.com and learn more about Ellie at www.ellieperlman.com.
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