Investing in multi family properties is among the most profitable forms of residential real estate. These types of real estate investments have an advantage over single-family properties by having multiple units, which typically translates into more rental income and higher return on investment.
Related: Understanding Multi Family Investment Property Returns and Benefits
What are the best cities for buying multi family homes for investment in the real estate market 2018? There are six cities real estate investors should consider, according to Mashvisor’s investment property calculator. The best cities for investing in multi family properties are Hollywood, FL, Jersey City, NJ, Long Beach, CA, Los Angeles, CA, Miami, FL, and New York, NY. We’ll list the city-level data and data for the top two neighborhoods for each city provided by Mashvisor’s real estate market analysis, which you can learn more about by clicking here.
Hollywood, FL
Median Property Price: $1,150,081
Rental Income: $2,585
Cap Rate / Cash on Cash Return: 0.64%
Florida is consistently one of the best states for investing in multi family properties, so there’s no surprise two of its cities (Hollywood and Miami) made the list. Hollywood may not be as widely known as Miami, but buying an investment property for multi family real estate investing in the city could be very lucrative, as detailed in the data above. The two best neighborhoods in Hollywood for investing in multi family properties are Hollywood Lakes and South Central Beach.
1.) Hollywood Lakes
Median Property Price: $600,000
Rental Income: $2,829
Cap Rate / Cash on Cash Return: 1.99%
2.) South Central Beach
Median Property Price: $361,909
Rental Income: $2,427
Cap Rate / Cash on Cash Return: 2.83%
Jersey City, NJ
Median Property Price: $662,820
Rental Income: $2,154
Cap Rate / Cash on Cash Return: 0.89%
It would be an understatement to say that investing in multi family properties is the optimal rental strategy in Jersey City. According to Neighborhood Scout, of about the 100,000 investment properties in the city, 85% of them are a form of a multi family property. These types of real estate investments are also inexpensive compared to the other five cities on this list. Be sure to consider investing in multi family properties in Jersey City soon, as it is heading towards a seller’s market.
Related: Is It a Buyer’s Market or a Seller’s Market?
The two best neighborhoods to buy a multi family home for sale in Jersey City are West Side and Greenville.
1.) West Side
Median Property Price: $423,496
Rental Income: $1,986
Cap Rate / Cash on Cash Return: 1.47%
2.) Greenville
Median Property Price: $390,051
Rental Income: $1,906
Cap Rate / Cash on Cash Return: 1.37%
Long Beach, CA
Median Property Price: $1,150,081
Rental Income: $2,585
Cap Rate / Cash on Cash Return: 0.64%
Like the previously mentioned Florida, the state of California is a real estate giant. It has the largest state economy in the US with positive growth. Naturally, multi family residential real estate becomes a money-making strategy with such conditions, and that is the case in Long Beach. The best places for buying a multi family home in Long Beach are Willmore City and Zaferia.
1.) Willmore City
Median Property Price: $1,109,056
Rental Income: $6,411
Cap Rate / Cash on Cash Return: 2.87%
2.) Zaferia
Median Property Price: $1,014,295
Rental Income: $5,174
Cap Rate / Cash on Cash Return: 2.71%
Los Angeles, CA
Median Property Price: $1,150,081
Rental Income: $2,585
Cap Rate / Cash on Cash Return: 0.64%
Los Angeles’ multi family real estate investing data is similar to Long Beach’s. Both cities have high median property prices, but that is typical of most multi family properties. Both cities also generate high rental income. This is especially true in Los Angeles’ best neighborhoods, South Los Angeles and Harvard Heights.
1.) South Los Angeles
Median Property Price: $625,580
Rental Income: $3,045
Cap Rate / Cash on Cash Return: 2.16%
2.) Harvard Heights
Median Property Price: $1,364,368
Rental Income: $6,168
Cap Rate / Cash on Cash Return: 1.97%
Miami, FL
Median Property Price: $1,150,081
Rental Income: $2,585
Cap Rate / Cash on Cash Return: 0.64%
Miami is an excellent city with diverse real estate opportunities. Whether you’re interested in buying Airbnb rentals or investing in multi family properties, Miami has it all. But let’s stick to multi family real estate investing. The best neighborhoods in Miami for this residential real estate strategy are Liberty City and Little Haiti.
Related: The 4 Best Places to Invest in Real Estate in Florida
1.) Liberty City
Median Property Price: $274,730
Rental Income: $1,658
Cap Rate / Cash on Cash Return: 2.97%
2.) Little Haiti
Median Property Price: $310,791
Rental Income: $1,815
Cap Rate / Cash on Cash Return: 2.58%
New York, NY
Median Property Price: $1,150,081
Rental Income: $2,585
Cap Rate / Cash on Cash Return: 0.64%
Metro cities are among the best cities to buy rental property for multi family investing, which automatically means that New York belongs on this list. The Big Apple generates high rental income for multi family real estate properties. This amount of rental income is consistent across its two best neighborhoods, East New York and Williamsbridge.
1.) East New York
Median Property Price: $1,150,081
Rental Income: $2,585
Cap Rate / Cash on Cash Return: 0.64%
2.) Williamsbridge
Median Property Price: $725,119
Rental Income: $2,412
Cap Rate / Cash on Cash Return: 1.22%
Takeaways from the Best Cities for Investing in Multi Family Properties
Investing in multi family properties will always remain one of the best strategies in residential real estate. All of the six cities on this list share common features that allow this strategy to thrive.
The six cities all have high rental income and high return on investment. This is a must for any successful strategy. Their locations’ conditions, namely a strong economy, enlarge the traditional tenant pool, which drives the demand for multi family real estate investing.
Want to start searching for a multi family home for sale in the real estate market 2018? Then sign up with Mashvisor! Our product allows real estate investors to search for any type of property in a matter of minutes! Whether you plan on investing in multi family properties or Airbnb rentals, you’ll want to use our state-of-the-art investment property calculator. Click here to start your 14-day free trial!
