Investing in MULTIfamily property is an excellent way for investors to make a solid return on their investment. There are many factors that go into choosing the best city for investing in a MULTIfamily property including job growth, population density, and the amount of available rental units.
When you invest in a MULTIfamily property, you want to choose an area that will have consistent or increasing renters. This is why job growth is an important factor to consider when looking for the best city to invest in multifamily property. You also want to find an area with a high population density as this will give you a larger pool of potential renters. By keeping an eye out on the country's hot real estate markets and finding out where the majority of people are moving to, you can find an excellent city to invest in multifamily property.
Top 10 Cities for Investing in MULTIfamily Properties
1. Denver, Colorado
Percentage of renters: 50%
Average cost of rent in 2022: $1,879 per month
Why Denver, CO is great for investing: Denver is one of the fastest-growing cities in the United States and is projected to continue to grow at a rapid pace. The job market is strong and there are many young professionals moving to the city. Denver is also a very desirable place to live with a high quality of life, which makes it easy to find renters for your multifamily property.
2. Charlotte, North Carolina
Percentage of renters: 47%
Average cost of rent in 2022: $1,559 per month
Why Charlotte, NC is great for investing: Charlotte is another city that is experiencing population and job growth. This surging population, growth in high-tech and professional services jobs, and relatively affordable cost of rent makes this city an excellent choice for those looking to invest in MULTIfamily properties.
3. Phoenix, Arizona
Percentage of renters: 46%
Average cost of rent in 2022: $1,547 per month
Why Phoenix, AZ is great for investing: Phoenix is the ideal blend of urban areas and suburban communities. This is incredibly attractive to a diverse demographic, bringing plenty of new families and retirees to the area year after year. With more affordable housing than other major metro areas, it's no wonder why Phoenix is the most populous city in the state.
4. Austin, Texas
Percentage of renters: 55%
Average cost of rent in 2022: $1,735 per month
Why Austin, TX is great for investing: Austin is one of the most popular–and fastest-growing–cities in the country and is known for its live music scene and AAA restaurants. The city also has a large number of young professionals and recent graduates and the Austin Board of Realtors has stated that many newcomers to the city are choosing to rent rather than buy.
5. Seattle, Washington
Percentage of renters: 54%
Average cost of rent in 2022: $2,190 per month
Why Seattle, WA is great for investing: Seattle is home to some of the largest companies in the world including Amazon, Starbucks, and Microsoft. The city also has a highly educated workforce and is known for being a great place to live and work. The combination of strong job growth and high rents makes Seattle an excellent choice for investors looking to purchase MULTIfamily properties.
6. Nashville, Tennessee
Percentage of renters: 46%
Average cost of rent in 2022: $1,694 per month
Why Nashville, TN is great for investing: Nashville is a popular destination for tourists and is known for its music scene. The city has been on numerous lists as one of the top trending cities to move to for years and while the real estate market has slowed a little over the last year or two, Nashville's real estate market is still one of the hottest in the country. The growing job market, vibrant downtown core, and low unemployment rate draw many to this thriving city.
7. Tucson, Arizona
Percentage of renters: 49%
Average cost of rent in 2022: $1,200 per month
Why Tucson, AZ is great for investing: Tucson is a great city for those looking to invest in MULTIfamily properties. The lower cost of rent, compared to many other cities on this list, is incredibly attractive to those looking to move to the city. The city is also home to the University of Arizona which has a large student population, which of course brings in a great deal of renters to any city!
8. Raleigh, North Carolina
Percentage of renters: 48%
Average cost of rent in 2022: $1,522 per month
Why Raleigh, NC is great for investing: Raleigh is one of the most educated cities in the United States and is home to a vast collection of world-class technology and life sciences institutions. The high quality of life in the city makes for a very competitive real estate market and both Raleigh and the neighboring Durham have become some of the fastest-growing cities in the country. This vibrant city is known to keep the university grads in the area once they've graduated rather than move away, which opens up plenty of opportunities for rentals.
9. Chicago, Illinois
Percentage of renters: 55%
Average cost of rent in 2022: $2,080 per month
Why Chicago, IL is great for investing: Chicago is one of the most populous cities in Illinois and is known for its diverse neighborhoods and thriving cultural scene. The city has a strong job market and is home to a number of large corporations. The house sales in Chicago have gone down due to high prices, so the percentage of renters has gone up. If you can afford to invest, this trending city is a great option!
10. Orlando, Florida
Percentage of renters: 65%
Average cost of rent in 2022: $1,820 per month
Why Orlando, FL is great for investing: Orlando is one of the most popular tourist destinations in the world and the real estate market is dominated by renters coming from more expensive cities. This top resort destination offers a wealth of opportunities to investors hoping to rake in the cash of the millions of visitors who come to Orlando every year.
The 10 best cities for investing in multifamily properties offer a variety of opportunities for those looking to invest. Whether you're looking for a city with a strong job market, vibrant culture, or low cost of rent, there's sure to be a city on this list that fits your needs! If you're considering investing in multifamily properties, any of these cities would be a great choice.