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The national housing market is undergoing a major shift and multifamily investors are taking notice. Through economic and generational factors, the housing market is seeing a lessening demand for single family home purchases. Instead of buying a home, young professionals are opting to rent.
Mark Holmes may know this growing trend better than anyone. As a certified property appraiser with Value Tech Realty, Mark travels the United States appraising multifamily properties. As an appraiser, he understands this rental boom from a valuation perspective. As an active single family investor and passive multifamily investor, he understands what it means from an investor’s standpoint.
This episode, Mark gives us a recap of the the national multifamily market as well as the Florida multifamily market. We discuss the recent rental boom and what it means for multifamily investors.
National Multifamily Overview
- 63% home ownership, down from 69% (2004)
- 37% renters: 15 million shift
- Financial recession brought on behavioral shift
- Job growth jump-started multifamily development
Florida Multifamily Overview
- Landlord friendly
- 3% job growth
- Statewide rent growth: 4%
- I-4 Corridor rent growth: 6%
Florida Multifamily Markets
- Tampa
- 4000 MF units online, last 12 mo.
- 65% absorption rate
- 3.7% rent growth
- Class A: 4.5% cap rates; Class B: 6%
- Orlando
- 5,500 MF units online, last 12 mo.
- 57% absorption
- 4.8% rent growth
- Melbourne
- 8% rent growth in last 12 mo.
- Miami/SFL
- 3,500 units online last 12 mo., 3,300 coming
- Nearly 100% absorption
- 3.3% rent growth
- 4.45% cap rates
- 49% of income goes to rent
What It Means for Multifamily Investors
- Capital looking to invest in multifamily is out there
- Class A property growth concessions trickling down to B + Cs
- Most buyer interest is in multifamily
- Interest rate increases mean cap rate increases
- Major market cap rates seeing downward trend
Contact Mark
Looking for property appraisals? Contact Value Tech Realty through their website. For single family and multifamily investors looking to work with Mark on a deal, contact him through email at mark1holmes1@gmail.com.