It is no secret that condo developments and apartment complexes are seeing a huge surge in renters. As millennials graduate from college, move out of their parents home and venture into the “real world,” they’re craving a place to call their own. However, today’s young home buyers aren’t ready to put down their roots because they’re curious as to what different cities within the valley have to offer. Therefore, they are renting…and will continue to rent for years until they find their perfect niche. Right now is a prime time for seasoned home buyers to invest in multifamily real estate.
On any given street in the last few years it was not uncommon for one to see a multifamily building that was in need of revitalization. Within the last year, we have seen several older buildings bought by investors who understand the value in the rental market and are capitalizing on the benefits of owning multifamily units. Imagine buying a multifamily complex for the price of an upscale single level home, renovating it, and reaping the benefits of bringing in rental cash flow for years to come! Investing in multifamily developments and revitalizing neighborhoods throughout the Valley will help boost property values and make the area more desirable to home buyers.
Within the last year we have seen rental rates increase and even so there is still a huge demand for rentals! Millennials are looking for unique properties with loads of character. Many of Phoenix and Scottsdale’s restored mid century complexes are all the craze, giving young renters that clean modern design with original character. Many of these once dilapidated buildings were bought by individual investors, renovated to modern standards and easily rented out, creating a large and steady return on investment.
As a Gen Y myself, I can only foresee that my fellow “Y’s” will encourage such rental practices upon their children, thus keeping the rental market strong for decades to come. That being said, when investing in rental properties, whether Multifamily or Single-family, one must educate themselves and BUY SMART. You MUST know your target area, understand what the rental rates are and determine what a proper return on your investment means to YOU. Be prepared to select and screen for qualified renters, or hire a property manager to oversee the rental. An investor turned landlord should know that by being a great landlord ensures that you will have great tenants.