If you are looking for great investment returns, multi-family housing delivers a strong performance. In fact, among the key real estate categories, apartments are among the best!
With property value on the rise, powerful rent growth, and record breaking occupancy rates, 2018 is expected to be an amazing year.
“Effective rents advanced at a 3.9 percent annual rate in the first half of 2017, and slowed only moderately to 3.6 percent in the third quarter. Over the course of the 12 months ended in September, we estimate that owners of investment sales quality assets achieved an average 4.0 percent increase in NOI and enjoyed capital appreciation of about 6.4 percent. One-year total returns averaged more than 11 percent, by our calculation,” according to National Real Estate Investor.
What can investors expect in 2018?
A steady demand for multifamily housing is expected for developers and investors in 2018. Basically a mirror of 2017, with the same stability.
Rents will continue to rise in many cities and sub-markets, as the demand for apartment living continues to grow in most demographics and occupancy rates will remain high. Which will encourage apartment property managers to continue to raise rents in 2018.
“The apartment sector’s performance results proved incredibly stable during 2017,” says Greg Willet, chief economist for RealPage Inc. In 2017 rents grew 2.4 percent on average. In 2018 they are forecasted to grow by 2.9 percent.
Strongest Markets in 2018
Those markets in close proximity to growing core cities and gateway markets, such as Atlanta, Orlando, Tampa, Jacksonville, and Columbia South Carolina, may be the strongest. The demand for multi family housing will be strong, but the competition from new construction will be low. Making it a great opportunity for investors.
Stand Out in 2018
The key to a successful development is to stand out from the competitors. New construction and upgrades of existing properties will need to focus on high tech and ‘green’ construction. A key factor for continued growth will be to understand the demographics and achieving their needs.
Contact SWET Construction Group for a successful project with high returns on investment!