We all know the struggle of trying to find the best rental property markets. It only adds to the complications that can come along with investing in multi family real estate.
If you were able to make this step of your investment property search easier, then you could focus on finding the best investment property, financing, negotiating, and eventually your property management strategy.
Well, with this list of the best rental property markets in 2018 for buying multi family homes, Step 1 is complete. Take a look at some of the best cities to invest in real estate with data taken from Mashvisor’s investment property calculator. Each city was selected based on the average return on investment (cash on cash return) a real estate investor can get with multi family homes for sale there.
Before leaping into multi family real estate, make sure you’re ready: 6 Questions to Ask Yourself Before Buying Multi Family Homes for Investment.
7 Best Rental Property Markets in 2018 for Multi Family Real Estate
#7 Marco Island, Florida
Median Property Price: $542,723
Median Rental Income: $2,734
Cash on Cash Return: 3.3%
Find multi family investment properties in Marco Island with cash on cash return up to 11% here!
#6 Baltimore, Ohio
Median Property Price: $124,550
Median Rental Income: $1,173
Cash on Cash Return: 3.98%
#5 Hyden, Kentucky
Median Property Price: $115,975
Median Rental Income: $981
Cash on Cash Return: 4.04%
#4 Manchester, New Jersey
Median Property Price: $132,190
Median Rental Income: $1,401
Cash on Cash Return: 5.15%
#3 Lely, Florida
Median Property Price: $263,514
Median Rental Income: $2,254
Cash on Cash Return: 5.35%
#2 Goldens Bridge, New York
Median Property Price: $957,338
Median Rental Income: $8,063
Cash on Cash Return: 6.08%
Find more affordable investment properties in Goldens Bridge here.
#1 Ashland, Ohio
Median Property Price: $88,750
Median Rental Income: $1,225
Cash on Cash Return: 6.61%
Start looking for the best investment properties in the city of your choice with cash on cash return up to 14% here.
Armed with the knowledge of the best rental property markets, Step 1 is almost complete. However, let’s keep going until we find the best multi family property out there.
More About Step 1 of Buying Multi Family Homes for Investment
With the thousands of cities to choose from in the US housing market, having a list of the 7 best rental property markets with good cash on cash return is definitely a big load off an investor’s shoulders. Now your job is to narrow down the best place to invest in real estate. So while things like median property price/affordability and return on investment are really important, make sure to look at the following indicators for each market:
- Crime rate
- Health of economy and job growth
- Population growth
- Property taxes
- Landlord-tenant laws
- Airbnb regulations
- Real estate appreciation rates
With a little bit of online market research, you can truly narrow down the best rental property markets to 1 (even 2 or 3) great cities to invest in.
Step 2: Finding the Best Neighborhood in the Best Rental Property Markets
Once you have chosen a few cities from the above list, it’s time to compare neighborhoods. Remember, some neighborhoods within the best cities to own investment properties will hold the best real estate investments while others could hold the worst. So, it’s important to carry out a thorough neighborhoods analysis.
First, start with some of the above points. Where are the neighborhoods with the lowest crime rate? The highest appreciation rate? The most affordable investment properties? Take these things into account along with the bigger picture when looking for rental properties to invest in.
The next step is to look at it from the real estate investing numbers. For this, you need reliable neighborhood data. I’d tell you to continue your online market research, but this data is harder to come by in that way. So, I’ll save you time and just provide you with one of the best resources for neighborhood data analysis: Mashvisor.
With our powerful heatmap analysis tool, a real estate investor can enter in a city and look at the different neighborhoods. Using a range of real estate metrics like median property price, cash on cash return for Airbnb and long term rentals, and Airbnb occupancy rate, you can easily find the best neighborhoods within the best rental property markets. Take a look:
From there, you can click on the neighborhoods that fit your criteria, like high cash on cash return, and see the exact numbers for that neighborhood. This way, you can easily compare neighborhoods within or across cities quickly and efficiently.
Want to try it out? Click here to get started with the heatmap analysis tool.
Step 3: Finding the Best Multi Family Home: Multi Family Real Estate Investment Analysis
Skimming over things like the cap rate and cash on cash return (which Mashvisor provides pre-calculated) for different multi family homes for sale is one way to eliminate poor performing properties in a neighborhood. Once the elimination process is over and you have a few investment properties to look into, it’s time for thorough multi family real estate investment analysis.
And for this, you’re going to want to use an investment property calculator. That way you can quickly carry out the analysis once you gather any needed data on the rental property. With the data provided by Mashvisor’s calculator, you can find out the following for any multi family property:
- Rental income
- Rental expenses
- Cash flow
- Cash on cash return
- Cap rate
- Occupancy rate
- Best investment property financing option for high returns
While it all starts with choosing only the best rental property markets, this kind of thorough analysis will ensure you choose a multi family home that will make you money (maybe even a passive income!).
Find out more: Learn How to Evaluate Multi Family Investment Properties
We’ve broken down the process of finding multi family homes for investment in the best rental property markets into 3 steps. It can be that easy with Mashvisor. Why not take advantage of the 14-day free trial now by clicking here?