Are you thinking about adding a multifamily property to your real estate investment portfolio for the first time or possibly expanding your portfolio of investment properties? You’ve come to the right place!
More investors than ever before are thinking about investing in multifamily properties especially as the stock market in the United States continues to experience record losses.
The good news about multifamily properties is that they continue to be a safe investment that produces steady cash flow even during these trying economic times.
In this article, I’ll share with you some of the best cities for buying multifamily rental properties in 2020.
Dallas, TX – One Of The Best Cities To Buy Real Estate In The United States
Dallas has quietly been one of the favorite cities of multifamily investors over the last 3 years because the city is growing rapidly but continues to have some of the lowest property prices in the United States.
Like Houston and other major cities in Texas, Dallas has enjoyed impressive job growth and it continues to be one of the most popular relocation destinations for people in the United States who are eager to escape high tax states like California.
The great thing about Dallas is that there are several major cities nearby that have also enjoyed impressive growth and are excellent for investment. These cities include Fort Worth, Plano, Arlington, Irving, McKinney, and Garland.
Besides Dallas, the other popular city for relocation and investment over the last 5 years has been Austin, TX.
The ATX area is a great place to invest in a multifamily property because it’s home to the University of Texas at Austin and several other major universities. Unless those students live on campus, they will, of course, need housing so that makes multifamily investment properties a great asset for any investor who chooses to invest there.
Besides being a great college town, there’s also plenty of things to do in the Austin area including restaurants, bars, shops, stores, and concerts held all year long like the annual South by Southwest show and Willie Nelson’s annual 4th of July Celebration.
As most investors have invested in Miami in recent years, Orlando has consistently “fallen under the radar” of investors who were eager to invest in vacation towns in Florida.
Thankfully, Orlando is getting the publicity it deserves because its population has grown by more than 20 percent in recent years. Why? The city has become a popular retirement destination for aging Baby Boomers who were looking for an affordable place to spend the twilight years of their lives.
Now with 2 million residents, Orlando is catching the attention of investors and it was even recently ranked on the RealWealth Network list of 18 Bes Places to Buy A Rental Property in 2020.
Like other Florida Beach towns, Orlando is a thriving city with plenty of things to see and do like the Universal Orlando Resort, Magic Kingdom Park and Epcot. There’s also convenient access to beaches, great restaurants, and attractions for people of all ages.
It’s one of the oldest cities in the United States and it continues to be a great place for real estate investors.
Over the last several years Charleston has had a rock bottom unemployment rate of 1.8 percent while having a population growth rate of 16.1 percent. These are encouraging statistics for multifamily investors because every investor wants to have confidence that they are investing in an area that’s economically stable with a great supply of renters.
Besides being rich in history, Charleston also offers plenty of great things to do including lots of natural attractions nearby, shops, restaurants and since it’s also a beach town, there’s convenient access to some of the best beaches in the United States as well.
Pittsburgh was one of the cities that was hit hard following the 2008 financial crisis but over the last 5 years, it’s bounced back and has grown stronger than ever thanks to Millennials who have flocked to Pittsburgh in recent years in search of affordable rentals.
Since most millennials prefer to rent vs. buy homes, this also makes Pittsburgh an ideal city for investing in multifamily properties because there’s no shortage of renters here who are looking for their next rental properties.
One of the main factors that have lured more millennials to Pittsburgh in recent years has been the fact that the city is transitioning from a city that was once known for its steel, to a city that’s now known as anther hub for technology companies in the United States.
Some of the most popular technology companies that call Pittsburgh home in 2020 include Pineapple Payments, Gecko Robotics, and Birdbrain Technologies.
If you’re the type of investor who is searching for the next “hot” city, Indianapolis is it. This city has taken a beating in recent years following the economic crisis and it’s continued to hold strong.
As of 2020, it offers a growing rental market that’s been fueled by Millennials who have been eager to escape other high-priced rental markets in the United States and this has enabled Indy’s population to grow by close to 10 percent.
Besides being a thriving sports town, Indianapolis also is a college town that boasts some of the top Universities in the United States including Indiana University and Marian University Indianapolis.
Tip – Indianapolis has been known to have a high crime rate over the last several years so it’s important to hire a reliable property management company that can deal with crime or other problems, should they occur, at your rental property.
I’ve offered you several great cities so far for investing in multifamily properties in 2020 but one of the best by far is Cleveland, Ohio. Here you can find multifamily properties priced as low as $80,000, this is because the city has seen its share of hard times in recent years but the city has remained strong so you may want to consider Cleveland before more investors start flocking here.
Like Indianapolis, Cleveland has also lured a steady flock of Millennial renters in recent years who are eager to escape high rent cities like San Francisco, New York or Boston.
Cleveland has transformed its business community in recent years and the city now includes a base of technology companies that specialize in everything from app development, software and more.
In Cleveland, you will also find a city that has a thriving nightlife with plenty of restaurants, shops, stores, things to do and the city is also a short drive to outdoor recreation options so there’s never a shortage of things to do all year long.
Little Rock, Ark
Little Rock is another great town for multifamily investing in 2020 because it’s also a thriving college town that’s home to the University of Arkansas at Little Rock and there’s also plenty of great things to see and do in the area as well.
With a growing population, Little Rock is another ideal city for multifamily real estate investing because it’s a walkable city with plenty of shops, stores, restaurants and attractions within proximity of each other.
A city is also a perfect place for people who enjoy outdoor attractions. There’s also plenty of great museums, galleries and a zoo in Little Rock as well.
Yes, Little Rock is an ideal city for real estate investing but it’s also important to mention that there are many other cities in Arkansas which are great hotspots for investing in multifamily properties. These cities include Fort Smith, Hot Springs, Jonesboro, and Texarkana.
Tip – Not every city in Arkansas is best for investing. You might find some cities listing Multifamily properties listed for crazy low prices in cities like Blytheville, Ark so it’s best to follow the tips in this article and find out what a city offers before you get excited about investing there.
Want another great town that’s perfect for multifamily real estate investment? If so, check out Springfield MO.
In Springfield, you will find one of the biggest cities in Missouri that also has most of the top brand name stores that people know and use regularly. Springfield is also a college town and is home to Missouri State University and several other community colleges as well.
Besides having a growing population, Springfield is a great city for real estate investing because real estate prices here are incredibly low when compared to the national average and any investor can get a lot for their money when they invest in Springfield, West Plains or other major cities across Missouri.
Missouri has been a “sleeper” favorite state for multifamily investors over the years because as most investors flocked to the West Coast or East Coast while the economy was booming, smart investors flocked to Missouri and invested in cities like Springfield because they knew they could get excellent ROI there.
As of March 2020, there are currently 89 multifamily properties for sale in Springfield MO and many of those properties are listed for prices ranging from a minimum of $50,000 to as high as $200,000.
Things to Keep in Mind When Investing in Out of State Rental Properties
When investing in out of state rental properties, it’s always important to follow these steps:
- Investigate the city – Use the Internet to research the city that you plan on investing in. This should include researching population growth, property values, things to do in the area, etc.
- Review local and state laws – Know what’s happening in a local area by reviewing both state and local laws. This is important because some states have adopted rent control laws in the last 12 months and you need to know more about the city that you’re investing in before you spend money there.
- Identify the right neighborhoods – Find ideal neighborhoods for investing by searching for neighborhoods that are close to publish transportation, in good school districts, near great restaurants and have plenty of shops, stores and things to see/do.
- Consider starting an LLC – This is an excellent way to minimize taxes and protect your assets.
- Connect with a local real estate agent – Find a Realtor® in the city that you plan on investing in who can send you leads for multifamily properties that are for sale in that area.
- Assemble a local team – Make contact with a reliable property inspector, contractor and property management company in the area that you can use when you invest in your first multifamily rental property there.
- Do your “due diligence” as an investor – Once you find a great multifamily property for investing in, always dig deep into things like the financials for the property so that you can verify that the property is earning the income that the owner claims it does.
Why You Don’t Want to Wait to Grow Your Real Estate Investment Portfolio In 2020
Even though most people are focused on coronavirus right now, the reality is that it’s still a great time to invest in multifamily properties nationwide.
Mortgage interest rates have never been lower and you can get a lot for your money especially if you invest in one or more cites that we’ve mentioned in this article.
If you plan on paying cash for a property, you can find some fantastic deals too when you use 2020 as your opportunity to add multifamily to your portfolio of investment properties.
Coronavirus will eventually pass, don’t sit on the “sidelines” waiting for your opportunity to invest in multifamily properties, make 2020 the year that you look back on as the year that you grew your investment portfolio and added assets that will only continue to grow in value for years to come.
I manage a diverse portfolio of investment properties across the United States that’s valued at over $80,000,000 and I’m looking for accredited investors who are interested in adding multifamily properties to their investment portfolios.
If you’re an accredited investor, and you’re interested in adding more properties to your portfolio, or you just haven’t had the time to invest in multifamily yourself, I invite you to contact me by clicking here.