As the old saying goes, success in real estate depends on three key factors: location, location, location. But what makes location so important? In many cases, it's not about the zip code or even the area's crime statistics, but the amenities available to local residents. This is especially true when it comes to multifamily properties, where tenants may trade square footage and the privacy of non-shared walls for walkability and access to time-saving services.
Common site selection factors can range from the quality of the local school district to the proximity to interstates and other major thoroughfares, but some are far more specific (and, at times, obscure). Learn more about the key macro and micro factors that can draw in prospective multifamily tenants.
Key Factors: Macro
Not all macro factors apply equally to all residents, you'll usually enjoy high-quality tenants and low turnover rates when your multifamily property checks off a few of these boxes:
An urban location
Rural areas can sometimes present a challenge to multifamily property investors. While it's not impossible to maintain low vacancy rates or above-market-rental costs in a suburban or rural area, many of today's target renters are in the market for a lifestyle that allows them to take a quick five-minute trip to the grocery store, walk their kids to school each morning, or make new friends at a neighborhood bar.
Access to employment centers
Not all urban or walkable areas are created equal; with today's record-low unemployment rates, a zip code that features unemployment rates approaching or exceeding double-digit percentages can be a red flag. Instead, look for properties in or near cities that are attracting new industry in areas like technology, manufacturing, healthcare, and finance.
With college costs continuing to rise, more parents than ever are concerned about ensuring their child has a top-notch public school education. But it's not always necessary to own property located in a top school district so long as local residents have the opportunity (via vouchers, school choice programs, or other means) to enroll their children in neighboring districts with highly-ranked schools.
Key Factors: Micro
While macro factors are universally applicable to some extent, micro site selection factors are best evaluated on a case-by-case.
With parking space at a premium in many cities, many renters may jump at the chance to transition to a car-free (or one-car family) lifestyle. Between private taxi services like Uber and Lyft, public scooters like Bird and Lime, and short-term rental cars like Zipcar, there have never been more ways to get around without a private vehicle.
Some of the most desirable neighborhoods operate as a small, largely self-sufficient microcosm. When located in a neighborhood that features restaurants, bars, grocery stores, and other retail outlets, schools, and businesses all within a walkable (or easily drivable) area, multifamily properties can command higher rental rates and attract more tenants.
The Most Popular Multifamily Amenities
Multifamily investors can put themselves ahead of the game by locating their properties in neighborhoods with the above features, but there are many on-site and property-specific amenities that can also attract quality tenants. And fortunately, most of these amenities can be made available for relatively little in added costs.
Most tenants will gravitate toward properties that feature cable and internet connectivity, "smart" home features like thermostats, security cameras, and keyless entry, energy-efficient and up-to-date appliances, and bundled utility services. By bundling cable, internet, and utility costs with the monthly rent, you'll be able to streamline the rental process for both you and your tenants, and by upgrading your tenants' home security services, you'll provide them with peace of mind that they've chosen a safe and crime-free location.Questions? Contact Patrick Morgan Today!