Real estate investors are increasingly investing in multifamily housing. One of their popular strategies is to purchase older housing units at lower prices and then putting them on the market after repositioning. Repositioning is a strategy that property owners use to improve the value of their multifamily housing units. It involves repaving, repainting all exterior surfaces, and adding amenities to create an aesthetically pleasing image with added functionalities for potential renters. Repositioning could be used as a way to increase your property’s attractiveness to renters or buyers who are looking for upgraded properties.
A repositioning project executed by experienced professionals like Streamline Builders in Korea Town, CA, can make your property talk of the town. However, a critical question is where to buy the property for maximum return on your investment. This blog post discusses three essential factors that determine the right location to buy multifamily housing for repositioning.
Go Where the Growth Is
The growth rate in an area is one of the primary factors to consider when buying and repositioning your property. To avoid being passed up by a region’s population growth, purchase property in an area with increasing job or income prospects. When buying real estate, it is essential to consider the labor market and how that plays into housing demand for potential property renters. To avoid being left behind when looking at areas where higher-paying job opportunities are growing, it is best to invest near regions projected for continued growth in the coming decades.
Can You Make Money in That Area?
It is critical to determine how profitable your chosen location could be. To determine the appropriate rental rates, you’ll need to survey the submarket for accurate market rates. Calculate current prices and compare them over time to gauge changes, such as increasing year-over-year prices. You’ll want to use the median price as a benchmark and compare it to your asking prices to generate realistic expectations. This is an important step when determining rental rates because different neighborhoods have varying market values.
It’s All About the Millennials!
As of 2018, 70 million Americans were between the ages of 20 to 36 years old, which is why multifamily owners are working hard to appeal to millennials. Over the last decade, multifamily housing has seen sustained growth in rental income due to the size of the millennial generation and their preference to rent for more extended periods. Millennials tend to be relatively long renters due to delayed parenthood and settling down with high-paying jobs, which drives this demand higher. As the population size of the millennial generation continues its rapid growth, so too does the demand for multifamily housing.
Apartment owners can increase profits by buying properties where millennials are gravitating. Millennials prefer to live near work, entertainment, and green spaces. Apartment owners can attract this group by informing renters about nearby amenities or highlighting the apartments’ aesthetics that cater to millennial preferences like comfortable kitchens featured in social settings or environmentally friendly features.
If you plan to reposition multifamily housing in Korea Town, CA, consider hiring Streamline Builders. We are experts when it comes to multifamily housing repositioning. Schedule a free consultation now.