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Best Cities To Buy Apartment Buildings

The Phoenix area is another one of the hottest multifamily markets in the nation, with more than 60,000 jobs added between Q1 2018 and Q1 2019. While unemployment did rise slightly over the same period, the vast increase in jobs has kept area housing demand strong. In fact, nearly 3,000 units were absorbed in 2019, while the vacancy rate dropped to 4.7%. Rent growth in Phoenix also remains high, having increased 8.1% over the last 12 months, with asking rents in some submarkets increasing as much as 10.4%. All of this bodes well for multifamily investors looking to purchase an apartment building (or buildings) in the area.

best cities to buy apartment buildings


The most profitable cities for multifamily investing depend on a variety of factors, such as employment growth, construction, rent, and vacancy rates. According to, the 6 best cities to invest in apartment buildings in 2019 are Minneapolis-St. Paul, San Diego, CA, Orlando, FL, Knoxville, TN, Tampa-St. Petersburg, FL, and Phoenix, AZ.

Investing in multifamily homes in desirable locations eventually results in reduced vacancy rates and higher rent growth. We'll discuss the best cities, motivations to invest, and characteristics of ideal locations for multifamily buildings.

Houston, with its seven million population, has several lucrative apartment investment prospects. Houston is the fifth largest metropolitan region in Texas, and it is home to 53 Fortune 1000 firms. This city's population growth is happening at a rate that is more than twice as fast as that of many other American cities.

Boise, Tucson, Salt Lake City and Phoenix are a few of the multifamily cities expected to thrive best between 2022 and 2023, with a 12% or higher predicted rent increase. On the other hand, between now and 2023, rents are expected to increase by little more than 6% in Northeast areas like Philadelphia, Pittsburgh, and Harford.

Today, a popular option for profitable long-term investment potential is multifamily real estate. You may create a strong REI portfolio of lucrative apartment buildings by carrying out some simple due research to identify the best investing markets and opportunities in the greatest city areas throughout the U.S.

Explore the best cities to buy a house based on home values, property taxes, home ownership rates, housing costs, and real estate trends. Ranking based on data from the U.S. Census, FBI, and other data sources. Read more on how this ranking was calculated.

Informal research sources are coming up with some of the best cities to buy property, while more formal studies such as the one from AttomData below (SFR segment) present another unique angle for real estate rental market investors.

Key factors affecting the migration to the growing cities is about the end of Covid and inner city crime fears, head office restarts, apartment vacancy rates in cities, growth of renting overall, and unaffordability of single family homes in the burbs.

Do these cities make the best cities to buy property? Those who were paying attention to our reports in the last 4 years, are reaping the rewards. Just the shear rent growth in these major cities makes them attractive for buyers.

Solid rental cash flow opportunitiesThe Huntsville real estate market is experiencing a boom, with affordable housing, good-paying jobs, and other factors drawing people to the area. As a result, investors have plenty of opportunities to choose from as they put their money into Huntsville properties. These are the primary reasons Huntsville made our best cities to invest in real estate list for two years in a row!

Montgomery, Alabama is another one of the best cities to buy rental property in 2023, offering both affordable properties and a strong rental market. The median home value in Montgomery is $181,065, while the median monthly rent is $1,215.

The population of the Dayton metro area grew at an average rate of 0.2% per year since 2015 after experiencing negative growth rates since 2010. But even though population growth has been very slow, affordable prices and easy access to the urban center of Cincinnati make Dayton one of the best cities to buy rental property for long term cash flow!

Apartment investing is notably successful in high-growth metros, in which apartment real estate investing is done with a value-add approach and professional property management is hired. Invest in the right market, and the rental income will cover all your expenses for apartment investing, leaving you with a good return on investment. Whatever strategy you choose to implement in apartment investing, do it in the following cities.

The Scottsdale housing market is finishing off our list of the best cities for apartment investing. With a total apartment unit inventory of 25,128, there is plenty of apartment investing opportunity here. These units generate a good level of rental income and real estate investors can be confident with an apartment investment in Scottsdale.

To find the best cities for renters, we scored 93 of the largest U.S. cities using apartment data from, disaster data from FEMA, park information from The Trust for Public Land, and other data sources.

You pay a premium to live in Irvine. It has the highest average rent in our Top 10 list. It also has the fourth highest median household income ($105,126) among the cities we analyzed, but average rent for a two-bedroom apartment in Irvine chews up 38% of the median income.

Investing in apartment buildings is a big commitment to make, as it is sometimes described as a career and not just an investing strategy. Investors may find that managing apartment complexes requires a deeper level of involvement than managing single-family units, both physically and financially. On the other hand, investing in apartment buildings brings about unique benefits not experienced in other niches. Keep reading to find out if owning an apartment complex is right for you, as well as tips and tricks on how to get started successfully.

Learning how to invest in apartment buildings is by no means easy to grasp, but by familiarizing yourself with the five steps below, you will make the process seem much more approachable. To get started, first make sure that entering this investing niche is absolutely the right fit for you:

Make sure owning an apartment building is right for you: Whether you have already built up a portfolio or are completely new to real estate investing, making sure that investing in apartment buildings is right for you is a crucial question to explore. There are several considerations, such as cost and time. The costs of owning an apartment building include the initial capital requirement, as well as an ongoing cash flow matrix associated with managing several tenant units at a time. Second, managing an apartment building arguably requires more involvement and management, such as dealing with tenant turnover, leasing paperwork, and addressing maintenance issues. Before diving into this new endeavor, make sure both your schedule and finances are equipped to accommodate a big change.

Determine the type of apartment building: One might recognize, from general life experience, that apartments come in all shapes and sizes. One building could be a rehabbed Victorian mansion that has been divided into several units, while another may be a modern multi-story building in a metropolitan area. Determining how much apartment you can afford will help narrow down your search, as well as identify what types of buildings will offer the best return on investment for your budget. Investors face a tricky trade-off between purchase price against the costs of repairs and renovation.

REITs: An REIT is a company that manages real estate investments, that oftentimes include apartment buildings. When you invest with an REIT, you invest in the company itself, much like buying stock in any other company. Read our article on REITs for beginners to find out more about this investing strategy.

Factors To Think About Before Buying An Apartment ComplexNot all apartment buildings are the same, and like any other type of deal, investors should take care to work every angle and address any variables before making an offer. Here are some factors to take into consideration when performing your market and property research that will help you think like a seasoned professional:

Preliminary numbers: Assessing preliminary numbers and financials allows investors to compare purchase deals. The rent roll, which is the total rent charged for all units multiplied by twelve, combined with occupancy rates, will provide an idea of the annual rental income. Dividing the purchase price by the number of units will help compare apartment buildings with different amounts of units and amenities. In addition, investors can estimate their net operating income by netting out expenses from the rent roll, which is then used to calculate the capitalization rate.

There are several pros and cons associated with owning an apartment complex, and investors should make sure to familiarize themselves with each to appreciate the commitment they are about to make fully. Some may even describe being an apartment owner like having a career in itself, so investing in apartment buildings should be approached with vigilance.

After all is said and done, investing in apartment buildings is a vocation that brings about unique advantages for investors to enjoy. Although the process may seem daunting at first, those who are willing to stay vigilant, mind their due diligence, and put in the hard work are bound to reap the benefits of investing in multifamily complexes.

In short: Apartment buildings in general are good investments, but not every individual apartment building is a good investment. Would-be investors must exercise caution when evaluating a property and take into account many factors, including the condition of the property, price relative to other similar properties, local real estate trends, and rental vs. ownership demand in the area. The easiest way to do this is with a rental property calculator that lets you forecast the returns you can expect from purchasing a particular apartment complex. 041b061a72

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