Job Diversity is another important factor we consider when selecting multifamily markets. We avoid markets that are dependent on a single industry especially jobs in manufacturing or cyclical sectors like oil, coal, steel etc. Manufacturing jobs more prone to being outsourced. We like markets with a good mix of industries and strong presence of healthcare jobs which tend be less affected by changes in the economy.
Safety is a very important factor we consider when looking at multifamily opportunities. A low crime rate typically leads to more tenant satisfaction and a reliable income. On the other hand, areas with high crime tend to attract delinquent rentals. Areas of high crime also pose significant management issues and affects the bottom line of the Multifamily business.
We invest in markets with a population of at least 100,000 people or markets within 10-20 miles of a metro area with that population size. The more people you have in the market, the more there is a need for housing. Larger population centers also tend to perform better in varying economic conditions.
Net absorption is the difference between the sum of all units that became available and the sum of all the units that became occupied during specific time period. We like to invest in areas with a positive net absorption which indicates and increase in demand for multifamily units.