The following are some highlights from a thorough article by Jennifer Duell-Popovec over on National Real Estate Investor:
Is it single-digit vacancy rates and double-digit rental rate growth? Can investors simply look at the most recent data from industry researcher Axiometrics Inc. and make their decisions based on numbers alone? If they do, they might end up investing in markets that are performing well today but lack any future growth prospects.
Or should investors take their cue from Wall Street and stick to the coastal markets—the so-called Sexy Six that regularly attract institutional investors? In doing so, investors might end up competing with every other investor and paying cap rates below 4 percent for assets that have little or no upside.
...five elements that create a top market for apartment investment.
Strong population growth
Young, mobile residents
Expanding employment base
“For us, it’s a submarket story,” Friedman explains, adding that there are a number of situations in which specific submarkets are more attractive than overall market. In Dallas, for example, Associated Estates is developing an apartment property in the Uptown submarket just north of Dallas’ city center. The Uptown submarket has little or no land left to build upon; moreover, there is plenty of demand in the Uptown market to absorb new inventory.
Educational attainment/educated workforce
Read the whole article (opens in a new tab so you may easily comment here): Five Characteristics Define the Nations Top Multifamily Markets.