![]() For real estate investors seeking an appropriate commercial multifamily market, employment growth is one of the most important factors to consider. Employment growth in a given market has a direct effect on population growth, which in turn has a direct effect on rental demand. When analyzing employment growth in a region, commercial multifamily investors often start by gaining an understanding of job creation trends. As a general rule, larger job markets play host to more job creators, allowing for increased stability of the overall employment level. However, it is also important to consider the composition of employers in a market. Manufacturing and virtual service jobs tend to be highly unpredictable, while government and health care jobs rarely move out of a market. The demographics of job holders in a market also play an important role in employment growth. Since the 18-34 year-old demographic is the most likely to rent, investors pay careful attention to jobs held predominantly by that age group. If jobs are being created with this demographic in mind, it is reasonable to assume that rental demand will increase as well.
0 Comments
![]() Choosing a market for commercial multifamily investing typically involves considerations such as population growth and employment growth, which relate directly to the demand for rentals. However, less obvious factors such as landlord-tenant laws can also have a significant impact on a prospective rental market. Multifamily apartments are subject to a wide range of regulations, from federal equal housing laws all the way down to local business practices. As such, rental terms are almost never exclusively in the hands of the property owner. Policies can alter a wide variety of rental areas, including required property living standards, allowable marketing practices, taxes, and tenants’ rights. In terms of landlord-tenant law specifically, ideal markets will provide favorable treatment of landlords in cases involving eviction and bad debt. In the best-case scenario, evictions will take no more than 30 to 45 days, and tenants will be held responsible for economic harm to the landlord. |
AuthorAn experienced real estate investor and co-founder of 37th Parallel Properties in Richmond, Virginia, Chad Doty has established himself as a leader in commercial multifamily real estate. Archives
January 2017
Categories |