What Are the Best Multifamily Markets With High Cap Rates in 2023?

Just a few months before 2023, traditional and Airbnb investors want to know the best place to invest in multifamily real estate next year.

Table of Contents

1. Why Invest in Multifamily Homes for Sale?
2. What Is Cap Rate in Multifamily Investing?
3. What Are the Best Places to Invest in Multifamily Real Estate 2023?

Investing in multifamily real estate holds many benefits for both beginner rental property investors and experienced ones. Indeed, buying rental properties with multiple housing units is emerging as one of the best real estate investment strategies for 2023. So, as a savvy investor, you probably also want to jump on the bandwagon.

But where do you get started? How do you choose a top location for long term and short term rentals of this type?

The first thing you need to know is where the best multifamily real estate markets 2023 are located. It is exactly what we will show you in this article. Moreover, if you’re still unsure why you should buy a duplex, triplex, or quadruplex next year, we’ll introduce you to the most important advantages of this property type over others.

In addition, we will show you how to calculate and use cap rate in real estate to find not only the best locations but also the most profitable investment properties for sale in any US housing market.

 So, grab a cup of tea or coffee, sit down comfortably, and find out the best multifamily investing markets based on cap rate for the coming year.

Why Invest in Multifamily Homes for Sale?

New real estate investors tend to stay away from multifamily properties for sale and focus on single family homes instead. There are two main reasons:

1. Newbies believe that multifamily properties are too expensive and thus beyond their budget; and,
2. They think that multifamily properties require a lot of hard work to buy, maintain, rent out, and manage.

The truth is that renting out multifamily real estate properties is one of the best investing strategies out there. Here’s why:

Pros of Multifamily Real Estate Investments

The main benefits that the multifamily real estate investment strategy provides over other alternatives include:

• There are many property types to choose from, including duplexes, triplexes, quadruplexes, apartment buildings, and condo complexes. They come at different prices, depending on the type, size, and location. Multifamily home values can range from a few thousand dollars to multi-million dollars.
• Multifamily real estate investing allows investors to grow their rental property portfolio quickly. Instead of buying multiple investment properties, landlords or Airbnb hosts can add several rental units to their portfolio with a single home.
• Investing in multifamily homes for sale is less risky than investing in a house. Even if one of the multiple rental units stays vacant for some time, you will continue receiving rental income from the rest.
• Managing a multifamily home for rent is easier than managing a few different rental properties. And as we know, time is money in the world of real estate. This strategy also involves less traveling in case of out of state real estate investments, which reduces both the time and expenses.
• Demand for multifamily rental properties in primary markets is expected to grow in 2023 and beyond. As the US housing market recovers from the effects of the COVID-19 pandemic, many will return to the large cities and rent spaces there. So, keep an eye on metro areas when choosing the best investment property.
• Hiring a property manager makes sense with multifamily homes, giving investors passive income and profit from professional rental management. Unlike with a single family home, you won’t be tempted to be a DIY landlord to save on property management fees.

Seeing all the above advantages, it makes sense to search for the best place to invest in multifamily real estate 2023.

Cons of Investing in Multifamily Real Estate Investment

To make an educated real estate investment decision, you must know the potential risks and traps associated with multifamily traditional and Airbnb rental properties, too. Here are the major ones:

• Investment and management costs are higher with multifamily real estate. Large properties come at higher prices and also require more recurring expenses with regard to property tax, insurance, management, maintenance, and repairs. It sometimes makes them suboptimal for beginner investors.
• Multifamily homes might lead to more frequent foreclosures. Because this property type costs more to purchase and own, investors often find themselves in a situation where they cannot afford the monthly mortgage payments.
• Rental property management is more complicated. Maintaining a few housing units, marketing multiple rentals, and screening and dealing with several tenants take several times more energy than renting a house. Though before giving up on multifamily real estate, don’t forget about the option of hiring a professional manager.

Weighing the pros and cons of multifamily real estate investments tilts the scales in favor of the pros. So naturally, investors are wondering how to find the best – most profitable – multifamily places in 2023 to invest in?

Similar to single family home investing, you must identify the best multifamily markets for 2023. These are the locations that offer the highest return on investment for this property type. And the cap rate is arguably the best measure of return in this case. Let’s see why.

What Is Cap Rate in Multifamily Investing?

So, what is cap rate?

The capitalization rate, or cap rate for short, is one of the most popular metrics of rate of return on rental properties in the real estate investing world. While this profitability metric is frequently used in residential single family home investing, it is particularly useful and popular in commercial and multifamily investments.

As the cap rate comes with many important advantages, we chose it for our ranking of the best places to invest in multifamily real estate 2023. We will discuss the pros and cons in a bit, and now we will take you through the process of calculating cap rate.

How to Calculate Cap Rate

To calculate cap rate on multifamily rental properties (or any other property type), use the following formula:

Cap Rate = Net Operating Income (NOI)/Current Market Value x 100%

The above formula means that the cap rate is simply the ratio of the annual rental income minus the rental expenses divided by the current price of the property.

Before we move forward to discuss the best places for multifamily investing in 2023, we need to ask: What is a good cap rate for multifamily rental properties?

The answer is the same as what is considered a good cap rate for single family homes for rent and any other property type: between 8% and 12%. This range allows investors to strike the right balance between profit and risk, as the cap rate also shows the level of risk associated with a certain property. After all, inside and outside real estate, higher profit means more risk.

Related: Where to Find the Best Beginner-Friendly Cap Rate Formula Calculator

To make sure that you completely understand the cap rate formula and feel comfortable applying it to your multifamily real estate investments, let’s go over an example.

Cap Rate Example With Multifamily Property

Let’s look at the following multifamily home for sale listed on the Mashvisor marketplace. It’s located in Vero Beach, Florida, which is the best place to invest in multifamily real estate for traditional rentals 2023, as you will see in our ranking in a bit.

• Current Market Value: $224,000
• Monthly Traditional Rental Income: $1,595
• Monthly Traditional Rental Expenses:
  • Insurance: $91
  • Property Management: $160
  • Property Maintenance: $187
  • Property Tax: $137

Thus:

Cap Rate = Net Operating Income/Current Market Value x 100%

Net Operating Income = Annual Rental Income – Annual Rental Expenses

Annual Rental Income = 12 x $1,595 = $19,140

Annual Rental Expenses = 12 x ($91 + $160 + $187 + $137) = $6,900

Net Operating Income = $19,140 – $6,900 = $12,240

Cap Rate = $12,240/$224,000 x 100%

Cap Rate = 5.46%

Advantages of Using Cap Rate to Evaluate Multifamily Real Estate

The cap rate has many advantages when looking for the best place to invest in multifamily real estate, as well as the best property for sale. These pros make it a preferred metric over cash on cash return and internal rate of return.

Most importantly, as you can see from the cap rate formula above, it is extremely easy to use as inputs are relatively few and relatively readily available to investors. You only need to input rental income, rental expenses, and current market value, and you will get the expected return on your investment. Just do a real estate market analysis to get the numbers.

Additionally, it allows for a straightforward comparison between the profitability potential of multiple places and investment properties for sale. Just go for the market and the property that offers the highest numbers, provided that it does not exceed the 12% borderline.

Last but not least, there are online tools that help investors find out the traditional and Airbnb cap rate of multifamily real estate properties. Using tech eliminates the need for manual calculations. For instance, the Mashvisor real estate investing app comes with an in-built Airbnb calculator that provides cap rate estimates based on the performance of rental comps.

Related: Rental Comps: What Are They and Where Can I Find Them?

Disadvantages of Using Cap Rate to Examine Multifamily Properties

While using the cap rate formula for calculating the rate of return on multifamily rental properties has a lot of benefits, there is only one major drawback. Namely, the cap rate does not take into account the method of financing the investment property.

In other words, with the cap rate multifamily homes for sale purchased in cash and purchased with a mortgage or another type of loan yield the same return. In reality, however, whether you buy an income property in cash vs. mortgage produces very different results for investors.

Thus, it’s recommended to use the cap rate for your preliminary market research and investment property analysis. Once you’ve passed the preliminary phase of real estate analysis, it’s good to add other metrics as well, like cash on cash return.

Related: 6 Types of Investment Property Loans

What Are the Best Places to Invest in Multifamily Real Estate 2023?

We’ve shown you why you should consider buying a multifamily home and why you should use the cap rate as your guiding tool in choosing the investment property. So, it’s time to look at the US cities that offer the highest cap rates by city for this rental property type in 2023.

The real estate data and figures presented below have been computed by Mashvisor’s investment property calculator. Our real estate investing tool uses big data and predictive analytics to conduct nationwide housing market analysis and forecast the 40 best multifamily markets 2023.

These are the 20 places that offer the highest cap rate for long term rental properties and the 20 best short term rental markets with the highest cap rate for this rental strategy.

For our analysis, we’ve focused on the best cities that have at least 100 active traditional or Airbnb rental listings, respectively, to ensure strong activity in the local rental market. Moreover, we’ve selected markets with median home values below $1 million. After all, the best place to invest in multifamily real estate must be affordable and profitable.

20 Multifamily Markets With the Highest Traditional Cap Rate

Below, we take a look at the 20 places in the US housing market that promise the highest return on investment on multifamily long term rental properties for sale in 2023. 

As you will see, it is a mix of smaller and bigger markets, but generally secondary and tertiary markets are expected to remain more profitable next year.

Interestingly, as many as 14 of the best places for the long term rental strategy are located within the Florida real estate market. The Sunshine State is regaining its position as one of the absolutely best locations for investing in real estate after a dip at the onset of the COVID-19 pandemic.

According to the September 2022 location data from Mashvisor, here are the top 20 multifamily markets with the highest traditional cap rate:

1. Vero Beach, FL

• Median Property Price: $732,939
• Average Price per Square Foot: $305
• Days on Market: 86
• Number of Traditional Listings: 621
• Monthly Traditional Rental Income: $2,671
• Traditional Cash on Cash Return: 4.37%
• Traditional Cap Rate: 4.48%
• Price to Rent Ratio: 23
• Walk Score: 78

2. Fountain Hills, AZ

• Median Property Price: $917,739
• Average Price per Square Foot: $363
• Days on Market: 92
• Number of Traditional Listings: 121
• Monthly Traditional Rental Income: $3,503
• Traditional Cash on Cash Return: 3.85%
• Traditional Cap Rate: 3.91%
• Price to Rent Ratio: 22
• Walk Score: 39

3. Hallandale Beach, FL

• Median Property Price: $855,673
• Average Price per Square Foot: $445
• Days on Market: 90
• Number of Traditional Listings: 637
• Monthly Traditional Rental Income: $2,905
• Traditional Cash on Cash Return: 3.45%
• Traditional Cap Rate: 3.57%
• Price to Rent Ratio: 25
• Walk Score: 79

4. Stuart, FL

• Median Property Price: $686,637
• Average Price per Square Foot: $353
• Days on Market: 67
• Number of Traditional Listings: 369
• Monthly Traditional Rental Income: $2,826
• Traditional Cash on Cash Return: 3.47%
• Traditional Cap Rate: 3.55%
• Price to Rent Ratio: 20
• Walk Score: 42

5. Williamsburg, VA

• Median Property Price: $550,568
• Average Price per Square Foot: $220
• Days on Market: 56
• Number of Traditional Listings: 174
• Monthly Traditional Rental Income: $2,136
• Traditional Cash on Cash Return: 3.27%
• Traditional Cap Rate: 3.35%
• Price to Rent Ratio: 21
• Walk Score: 81

6. Dania Beach, FL

• Median Property Price: $557,719
• Average Price per Square Foot: $361
• Days on Market: 58
• Number of Traditional Listings: 215
• Monthly Traditional Rental Income: $2,331
• Traditional Cash on Cash Return: 3.25%
• Traditional Cap Rate: 3.34%
• Price to Rent Ratio: 20
• Walk Score: 86

7. Palm Beach Gardens, FL

• Median Property Price: $969,109
• Average Price per Square Foot: $436
• Days on Market: 57
• Number of Traditional Listings: 629
• Monthly Traditional Rental Income: $3,967
• Traditional Cash on Cash Return: 3.29%
• Traditional Cap Rate: 3.34%
• Price to Rent Ratio: 20
• Walk Score: 2

8. Melbourne, FL

• Median Property Price: $496,177
• Average Price per Square Foot: $257
• Days on Market: 57
• Number of Traditional Listings: 563
• Monthly Traditional Rental Income: $2,049
• Traditional Cash on Cash Return: 3.18%
• Traditional Cap Rate: 3.26%
• Price to Rent Ratio: 20
• Walk Score: 73

9. Riviera Beach, FL

• Median Property Price: $813,480
• Average Price per Square Foot: $402
• Days on Market: 67
• Number of Traditional Listings: 286
• Monthly Traditional Rental Income: $2,667
• Traditional Cash on Cash Return: 3.17%
• Traditional Cap Rate: 3.25%
• Price to Rent Ratio: 25
• Walk Score: 43

10. Saint Petersburg, FL

• Median Property Price: $554,100
• Average Price per Square Foot: $344
• Days on Market: 56
• Number of Traditional Listings: 1,155
• Monthly Traditional Rental Income: $2,332
• Traditional Cash on Cash Return: 3.04%
• Traditional Cap Rate: 3.13%
• Price to Rent Ratio: 20
• Walk Score: 42

11. Naples, FL

• Median Property Price: $917,503
• Average Price per Square Foot: $459
• Days on Market: 78
• Number of Traditional Listings: 1,430
• Monthly Traditional Rental Income: $3,317
• Traditional Cash on Cash Return: 3.07%
• Traditional Cap Rate: 3.13%
• Price to Rent Ratio: 23
• Walk Score: 29

12. Fredericksburg, VA

• Median Property Price: $502,706
• Average Price per Square Foot: $226
• Days on Market: 69
• Number of Traditional Listings: 605
• Monthly Traditional Rental Income: $2,058
• Traditional Cash on Cash Return: 3.04%
• Traditional Cap Rate: 3.11%
• Price to Rent Ratio: 20
• Walk Score: 7

13. Punta Gorda, FL

• Median Property Price: $667,738
• Average Price per Square Foot: $319
• Days on Market: 88
• Number of Traditional Listings: 346
• Monthly Traditional Rental Income: $2,677
• Traditional Cash on Cash Return: 3.02%
• Traditional Cap Rate: 3.08%
• Price to Rent Ratio: 21
• Walk Score: 14

14. Fort Myers, FL

• Median Property Price: $546,592
• Average Price per Square Foot: $295
• Days on Market: 86
• Number of Traditional Listings: 1,324
• Monthly Traditional Rental Income: $2,172
• Traditional Cash on Cash Return: 3.00%
• Traditional Cap Rate: 3.07%
• Price to Rent Ratio: 21
• Walk Score: 26

15. Carmel, IN

• Median Property Price: $560,791
• Average Price per Square Foot: $200
• Days on Market: 62
• Number of Traditional Listings: 116
• Monthly Traditional Rental Income: $2.289
• Traditional Cash on Cash Return: 3.01%
• Traditional Cap Rate: 3.06%
• Price to Rent Ratio: 20
• Walk Score: 49

16. Alexandria, VA

• Median Property Price: $673,470
• Average Price per Square Foot: $440
• Days on Market: 48
• Number of Traditional Listings: 1,773
• Monthly Traditional Rental Income: $2,827
• Traditional Cash on Cash Return: 2.98%
• Traditional Cap Rate: 3.03%
• Price to Rent Ratio: 20
• Walk Score: 54

17. Palm Springs, CA

• Median Property Price: $973,099
• Average Price per Square Foot: $533
• Days on Market: 59
• Number of Traditional Listings: 181
• Monthly Traditional Rental Income: $3,651
• Traditional Cash on Cash Return: 2.99%
• Traditional Cap Rate: 3.03%
• Price to Rent Ratio: 22
• Walk Score: 59

18. Fort Lauderdale, FL

• Median Property Price: $988,801
• Average Price per Square Foot: $529
• Days on Market: 82
• Number of Traditional Listings: 1,853
• Monthly Traditional Rental Income: $4,008
• Traditional Cash on Cash Return: 2.94%
• Traditional Cap Rate: 3.00%
• Price to Rent Ratio: 21
• Walk Score: 48

19. Cape Coral, FL

• Median Property Price: $584,810
• Average Price per Square Foot: $360
• Days on Market: 83
• Number of Traditional Listings: 1,128
• Monthly Traditional Rental Income: $2,145
• Traditional Cash on Cash Return: 2.94%
• Traditional Cap Rate: 3.00%
• Price to Rent Ratio: 23
• Walk Score: 77

20. Sarasota, FL

• Median Property Price: $828,367
• Average Price per Square Foot: $435
• Days on Market: 88
• Number of Traditional Listings: 999
• Monthly Traditional Rental Income: $3,152
• Traditional Cash on Cash Return: 2.92%
• Traditional Cap Rate: 2.97%
• Price to Rent Ratio: 22
• Walk Score: 50

If any of these best multifamily real estate markets look like the right fit for your strategy, Mashvisor can help you locate the most profitable properties within your budget there.

20 Multifamily Markets With the Highest Airbnb Cap Rate

Next, we look at the 20 most profitable places for buying multifamily Airbnb for sale in 2023, based on Mashvisor’s location data for September.

According to expert US housing market predictions 2023, the vacation rental industry will continue to grow at an accelerated rate. As pandemic-related restrictions are further eliminated, people are catching up on missed travel and vacation opportunities during the peak of the Coronavirus.

One trend worth mentioning is that the best vacation rental markets for next year are very affordable. Except for one, all of them show median property prices below the $400,000 mark. Many actually offer multifamily investment properties for sale below $300,000. This makes these markets accessible and attainable for beginner real estate investors.

Here are the top 20 multifamily markets with the highest Airbnb cap rate, based on Mashvisor’s location data for September 2022:

1. Geneva, OH

• Median Property Price: $244,367
• Average Price per Square Foot: $144
• Days on Market: 197
• Number of Airbnb Listings: 130
• Monthly Airbnb Rental Income: $3,333
• Airbnb Cash on Cash Return: 8.08%
• Airbnb Cap Rate: 8.38%
• Airbnb Daily Rate: $228
• Airbnb Occupancy Rate: 50%
• Walk Score: 66

2. Clawson, MI

• Median Property Price: $268,941
• Average Price per Square Foot: $224
• Days on Market: 30
• Number of Airbnb Listings: 298
• Monthly Airbnb Rental Income: $3,527
• Airbnb Cash on Cash Return: 7.87%
• Airbnb Cap Rate: 8.12%
• Airbnb Daily Rate: $160
• Airbnb Occupancy Rate: 58%
• Walk Score: 69

3. Nashville, IN

• Median Property Price: $465,333
• Average Price per Square Foot: $187
• Days on Market: 71
• Number of Airbnb Listings: 145
• Monthly Airbnb Rental Income: $4,968
• Airbnb Cash on Cash Return: 7.79%
• Airbnb Cap Rate: 7.95%
• Airbnb Daily Rate: $260
• Airbnb Occupancy Rate: 50%
• Walk Score: 50

4. Shaler, PA

• Median Property Price: $266,850
• Average Price per Square Foot: $128
• Days on Market: 49
• Number of Airbnb Listings: 152
• Monthly Airbnb Rental Income: $3,292
• Airbnb Cash on Cash Return: 7.58%
• Airbnb Cap Rate: 7.84%
• Airbnb Daily Rate: $135
• Airbnb Occupancy Rate: 68%
• Walk Score: 24

5. Reading, OH

• Median Property Price: $232,589
• Average Price per Square Foot: $149
• Days on Market: 50
• Number of Airbnb Listings: 159
• Monthly Airbnb Rental Income: $2,820
• Airbnb Cash on Cash Return: 7.35%
• Airbnb Cap Rate: 7.63%
• Airbnb Daily Rate: $103
• Airbnb Occupancy Rate: 57%
• Walk Score: 80

6. Schiller Park, IL

• Median Property Price: $275,209
• Average Price per Square Foot: $207
• Days on Market: 44
• Number of Airbnb Listings: 102
• Monthly Airbnb Rental Income: $3,661
• Airbnb Cash on Cash Return: 7.39%
• Airbnb Cap Rate: 7.63%
• Airbnb Daily Rate: $141
• Airbnb Occupancy Rate: 63%
• Walk Score: 71

7. Millersburg, OH

• Median Property Price: $284,600
• Average Price per Square Foot: $198
• Days on Market: 59
• Number of Airbnb Listings: 137
• Monthly Airbnb Rental Income: $3,139
• Airbnb Cash on Cash Return: 7.37%
• Airbnb Cap Rate: 7.61%
• Airbnb Daily Rate: $176
• Airbnb Occupancy Rate: 55%
• Walk Score: 52

8. Port Allen, LA

• Median Property Price: $235,406
• Average Price per Square Foot: $159
• Days on Market: 21
• Number of Airbnb Listings: 227
• Monthly Airbnb Rental Income: $2,671
• Airbnb Cash on Cash Return: 7.35%
• Airbnb Cap Rate: 7.60%
• Airbnb Daily Rate: $137
• Airbnb Occupancy Rate: 52%
• Walk Score: 49

9. Bellwood, IL

• Median Property Price: $248,733
• Average Price per Square Foot: $200
• Days on Market: 64
• Number of Airbnb Listings: 138
• Monthly Airbnb Rental Income: $3,521
• Airbnb Cash on Cash Return: 7.24%
• Airbnb Cap Rate: 7.50%
• Airbnb Daily Rate: $145
• Airbnb Occupancy Rate: 71%
• Walk Score: 82

10. Richmond Heights, OH

• Median Property Price: $227,770
• Average Price per Square Foot: $129
• Days on Market: 100
• Number of Airbnb Listings: 215
• Monthly Airbnb Rental Income: $2,889
• Airbnb Cash on Cash Return: 7.19%
• Airbnb Cap Rate: 7.46%
• Airbnb Daily Rate: $121
• Airbnb Occupancy Rate: 56%
• Walk Score: 23

11. Kerhonkson, NY

• Median Property Price: $333,889
• Average Price per Square Foot: $296
• Days on Market: 62
• Number of Airbnb Listings: 120
• Monthly Airbnb Rental Income: $3,876
• Airbnb Cash on Cash Return: 7.16%
• Airbnb Cap Rate: 7.36%
• Airbnb Daily Rate: $265
• Airbnb Occupancy Rate: 51%
• Walk Score: 30

12. West Saint Paul, MN

• Median Property Price: $303,245
• Average Price per Square Foot: $175
• Days on Market: 36
• Number of Airbnb Listings: 304
• Monthly Airbnb Rental Income: $3,410
• Airbnb Cash on Cash Return: 7.06%
• Airbnb Cap Rate: 7.27%
• Airbnb Daily Rate: $135
• Airbnb Occupancy Rate: 67%
• Walk Score: 75

13. Robbinsdale, MN

• Median Property Price: $310,344
• Average Price per Square Foot: $160
• Days on Market: 34
• Number of Airbnb Listings: 314
• Monthly Airbnb Rental Income: $3,408
• Airbnb Cash on Cash Return: 6.98%
• Airbnb Cap Rate: 7.18%
• Airbnb Daily Rate: $148
• Airbnb Occupancy Rate: 62%
• Walk Score: 73

14. Kenmore, NY

• Median Property Price: $208,754
• Average Price per Square Foot: $132
• Days on Market: 109
• Number of Airbnb Listings: 411
• Monthly Airbnb Rental Income: $2,737
• Airbnb Cash on Cash Return: 6.77%
• Airbnb Cap Rate: 7.04%
• Airbnb Daily Rate: $137
• Airbnb Occupancy Rate: 59%
• Walk Score: 77

15. Midway Park, NC

• Median Property Price: $198,055
• Average Price per Square Foot: $137
• Days on Market: 76
• Number of Airbnb Listings: 101
• Monthly Airbnb Rental Income: $2,235
• Airbnb Cash on Cash Return: 6.75%
• Airbnb Cap Rate: 7.03%
• Airbnb Daily Rate: $100
• Airbnb Occupancy Rate: 60%
• Walk Score: 12

16. Fairbanks, AK

• Median Property Price: $373,672
• Average Price per Square Foot: $179
• Days on Market: 74
• Number of Airbnb Listings: 292
• Monthly Airbnb Rental Income: $4,039
• Airbnb Cash on Cash Return: 6.84%
• Airbnb Cap Rate: 7.01%
• Airbnb Daily Rate: $153
• Airbnb Occupancy Rate: 74%
• Walk Score: 19

17. Galena, IL

• Median Property Price: $432,416
• Average Price per Square Foot: $235
• Days on Market: 90
• Number of Airbnb Listings: 345
• Monthly Airbnb Rental Income: $4,096
• Airbnb Cash on Cash Return: 6.78%
• Airbnb Cap Rate: 6.99%
• Airbnb Daily Rate: $273
• Airbnb Occupancy Rate: 52%
• Walk Score: 76

18. New Brighton, MN

• Median Property Price: $323,821
• Average Price per Square Foot: $162
• Days on Market: 52
• Number of Airbnb Listings: 115
• Monthly Airbnb Rental Income: $3,690
• Airbnb Cash on Cash Return: 6.80%
• Airbnb Cap Rate: 6.99%
• Airbnb Daily Rate: $144
• Airbnb Occupancy Rate: 66%
• Walk Score: 27

19. Gwynn Oak, MD

• Median Property Price: $285,973
• Average Price per Square Foot: $183
• Days on Market: 38
• Number of Airbnb Listings: 380
• Monthly Airbnb Rental Income: $3,087
• Airbnb Cash on Cash Return: 6.69%
• Airbnb Cap Rate: 6.89%
• Airbnb Daily Rate: $124
• Airbnb Occupancy Rate: 50%
• Walk Score: 60

20. Cheviot, OH

• Median Property Price: $197,844
• Average Price per Square Foot: $111
• Days on Market: 49
• Number of Airbnb Listings: 156
• Monthly Airbnb Rental Income: $2,098
• Airbnb Cash on Cash Return: 6.63%
• Airbnb Cap Rate: 6.98%
• Airbnb Daily Rate: $114
• Airbnb Occupancy Rate: 54%
• Walk Score: 63

Mashvisor can help you locate the best-performing multifamily properties for sale in any of the markets listed above, as well as any other US market.

Final Words

Multifamily rental properties – both traditional and Airbnb – have always been a great real estate investing strategy, and this trend will continue into 2023. While they come with a few risks and challenges, their pros clearly outweigh their cons.

So, if you think that this is the right property type for your investor needs, it makes sense to use the cap rate to find the best property and the best place to invest in multifamily real estate. To help even those with little experience in the rental industry, we’ve provided a list of the best US markets for buying multifamily long term and short term rentals in 2023.

If you’re leaning towards the traditional rental strategy, we recommend looking into the Florida housing market. More than half of the places with the highest traditional cap rates by city are located in Florida.

Meanwhile, if you haven’t decided on a strategy yet, we advise you to consider an Airbnb investment property. The best multifamily markets for short term rentals come with lower prices and higher cap rates. And this is the perfect combination for successful and profitable investments.

Now that you know the best multifamily markets 2023, all that is left is to sign up for Mashvisor to start searching for the most profitable multifamily real estate for sale. Start your 7-day free trial today to welcome the new year well prepared.