According to a recent survey by Verizon, more Americans are considering 5G network availability as a major deciding factor
when looking for new homes. 87% of the respondents agree that having a house with ultra-fast 5G speed immediately makes the property more valuable.
Property agents are also starting to see the impact of 5G on real estate sales, with 62% of them believing that the next two years will introduce more opportunities to advertise access to a 5G network in a home. 69% of these real estate agents also say that property clients have asked for details about broadband access in homes they’re looking at.
But what does this demand for 5G networks mean for real estate investors?
Although 5G technology is not fully available everywhere (the U.S. is still in the third year of a 10-year rollout), it is driving a lot of conversations, including both residential and commercial real estate investment. It is expected that it will have an effect on both landlords and tenants as well as Airbnb hosts and guests. Many landlords and developers have started looking at strategies for future-proof apartments and, therefore, use this to influence property prices and rental rates.
Better housing experience for tenants
Great tenant experience remains a priority for most real estate stakeholders. In a report by Deloitte, which surveyed 750 commercial real estate executives in 10 countries, including the U.S., 92% of these executives said they would increase technology investments that are related to tenant experience.
According to Matt Kimmel, a principal at Deloitte:
“The old real estate mantra of location, location, location for real estate morphed into location, information, and analytics as the three drivers. Now we believe the new mantra is around location, experience, and analytics. That experience and analytics is largely driven by the technological capability of mobility and apps. 5G is going to have a profound impact.”
Elsewhere, MillionAcres reports that top REITs in the U.S. have started installing 5G antennas in their buildings and other property investments. For real estate investors, 5G cell towers and the adoption of new technology will be a major value proposition when it comes to marketing their rental properties to both long-term and short-term renters. Offering access to 5G internet will allow them to charge higher rental rates compared to rental comps without this access. Furthermore, 5G network availability will be a key factor when selling housing properties, especially in markets with stiff competition. The Verizon survey clearly shows that this technology is turning into a major factor in real estate sales.
More selling points for multifamily property owners
Roughly 43 million residences in the U.S. are multifamily properties, and the number keeps growing, from young people just starting a career or older people who want to downsize. With this increasing growth, homeowners are seeking new ways to differentiate themselves and increase real estate sales. High-speed internet is one of the real estate technology trends they are adopting for multifamily residences.
Wired network systems can be a headache for property owners and also the reason why tenants end up not renting in a multifamily apartment. With the emergence of the 5G towers, wiring and its associated complications could soon be forgotten, while also increasing real estate sales. This is especially important for rental property owners who already sell internet services to their residents.
Best 5G enabled cities for real estate investment
Considering that 5G internet is fast becoming a major selling point to renters across the country, it is only right that investors should make it part of their strategy for increasing real estate sales and when checking cities with real estate listings. With this in mind, here are some of the best cities for real estate investing, based on Mashvisor’s nationwide real estate market analysis. Bear in mind that all of these cities appear in the top 20 cities for renter interest in the U.S.
Los Angeles, CA
For a long time now, the Los Angeles housing market, in specific, and the California real estate market, in general, has been a hot one. And despite not being the most affordable housing market around, Los Angeles can be a profitable investment for spiking real estate sales if you can afford the cash. This is especially because Los Angeles is a strong rental market with homeownership rates on a decline for years now. For context, one-third of LA residents who earn over $100,000 prefer traditional rentals rather than homeownership. This is also driving the demand for luxury apartments like condos.
- Median Property Price: $1,190,958
- Average Price per Square Foot: $928
- Traditional Rental Income: $3,787
- Traditional Cash on Cash Return: 2.00%
- Price to Rent Ratio: 26
New York City, NY
Compared to many housing markets, the New York real estate market was greatly affected by the pandemic. But it remains the ideal city for many U.S. residents as it has a diverse economy, including job opportunities for both middle-class and affluent residents. So, there are lots of people looking for cheap houses for rent. Also worthy of note for real estate investors is the fact that there are more renters in New York than there are homeowners — a whopping 76.8% rent homes.
- Median Property Price: $1,092,371
- Average Price per Square Foot: $629
- Traditional Rental Income: $2,666
- Traditional Cash on Cash Return: 1.16%
- Price to Rent Ratio: 34
This is again another strong market for income properties, where more than 50% of the population rents homes rather than owning. This is even more impressive when you consider the fact that it is the most populous city in the mid-western part of the U.S. As of 2018, it was the second-most visited city in the country. The metropolis also boasts of 32 of America’s Fortune 500 companies. All of these factors and 5G availability make the Chicago real estate market 2021 a worthy investment destination for month-to-month rentals.
- Median Property Price: $479,347
- Average Price per Square Foot: $349
- Traditional Rental Income: $2,046
- Traditional Cash on Cash Return: 1.55%
- Price to Rent Ratio: 20
With the Phoenix real estate market, you’re looking at one of the highest-appreciating cities in the Arizona housing market. The population in Phoenix is also growing at a fast rate. According to the U.S. Census Bureau, Phoenix’s population has increased by almost 15% in the last 10 years, which places it above the national average. And as we all know, population growth is a determining factor for housing demand, for both outright purchases and long-term rental properties.
- Median Property Price: $523,779
- Average Price per Square Foot: $268
- Traditional Rental Income: $1,588
- Traditional Cash on Cash Return: 2.08%
- Price to Rent Ratio: 27
Houston is the 4th largest city in the U.S. and the number one market for job creation. A perfect combo for people looking for homes for sale. Only New York has more Fortune 500 companies than Houston, while it is also one of the hot spots for the booming oil and gas industry in America. This means lots of people are moving in for employment opportunities.
- Median Property Price: $427,998
- Average Price per Square Foot: $192
- Traditional Rental Income: $1,849
- Traditional Cash on Cash Return: 2.58%
- Price to Rent Ratio: 19
Ready to boost real estate sales?
If you are a real estate investor, understanding the positive impact of 5G on real estate is one part of the puzzle. You still need to find the most profitable properties for investment in the cities with 5G coverage. Mashvisor, a real estate analytics tool, helps you to get this information including data like rental income, rental expenses, occupancy rate, cash flow, cash on cash return, and cap rate.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.