Ep. 126 Mark Holmes: What Multifamily Investors Need to Know About the Rental Boom

admin — Mon, 15 May 2017 09:00:36 +0000

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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.