Investors are getting ready for another great year as apartment development is expected to remain steady in 2018. Rising rents and high occupancy rates will make new construction and renovations of multi-family housing a worthwhile investment.
“Overall, we expect that same stability to hold in 2018, with occupancy and rent growth anticipated to basically mirror 2017’s statistics,” says Greg Willet, chief economist for RealPage Inc., a Richardson, Texas-based provider of property management and software services.
Rents for multi-family housing are expected to climb in 2018. The average rent in 2017 grew 2.4 percent and in 2018 they are forecasted to grow by 2.9 percent.
The new tax framework will be steering potential home owners away from purchasing that new house, because of the elimination of related tax benefits. As a huge fiscal stimulus, this major tax reform may even encourage investors to develop new apartment construction and renovate existing properties.
“Those neighborhoods with the most intense concentrations of new supply on the way tend to still be in the country’s urban cores, although some suburban locations will add considerable new product, too,” says Willett.
The strongest markets are located in close proximity to flourishing core cities such as Atlanta, Miami, Jacksonville, Tampa, and Orlando. These sub-markets will experience a ‘spillover effect’. The demand for apartments are high and they won’t be as affected by competing new construction.
“There is still a hunger for yield by investors,” says Jim Costello, senior vice president for Real Capital Analytics (RCA). “I don’t see 2018 as being that much different.”
According to the National Real Estate Investor, “In 2018, we expect these trends to continue fueling a strong multifamily market. Our latest renter research found that an increasing number of renters across demographic groups are satisfied with their living situation and consider renting the most affordable option for the foreseeable future.”
Investors are in for high returns when it comes to apartment construction and multi-family housing renovations. It all starts by contacting SWET Construction Group.