Large Lesser Known and Emerging Markets Offer Strong New Multifamily Construction Value

Finding good markets for new construction right now is a challenge. Investors are more focused than ever on long term value, current cash flow, and risk mitigation. At the same time, in the largest markets construction costs remain high and in many occupancy is still struggling. Nevertheless, there is a tier of markets in the Southeastern United States that offer strong value for new construction.
In some areas such as Raleigh, North Carolina or Orlando, Florida the economies have struggled somewhat less and occupancy is stronger with activity picking up more quickly than many other areas around the country. At the same time, Running A Successful Construction Company Pdf costs are surprisingly low. For example, projects in these areas are achieving construction costs under $70 per square foot and in some cases even lower. Construction labor is available as significantly less cost, and at the same time, material costs are down significantly as well. This is the beginning of a good story, but the situation is even better.
There are areas in these markets that have a shortage of rental housing. Tighter credit requirements, changing demographics, heavier down payment requirements, portfolio losses, and damaged faith in the home as an investment is making rental housing more attractive. Further, some of these markets have strong rental values with 2 bedroom + units renting at more than $1,000 per month.
Tie all these facts together and for projects that can gain financing capitalization rates projected are very attractive. In some cases, brand new class A projects offer values of greater than 8% and sometimes 9% cap rates for new buyers. This highly unusual situation bodes well for investors and developers who have projects positioned to go to Electrician List as bank lending begins to loosen up and there are signs that this is occurring.
So what should investors be on the lookout for? The main goals should be to find locations that are highly desirable for access to employment, shopping, entertainment, and so forth. Take a close look at the evolving market conditions to assure that decisions regarding amenities, features, unit size, unit efficiency, etc. are consistent with where the renting demographics preferences and needs are. There are significant signs that where a few years ago bigger was better now the focus is on smaller, more efficient, and high quality of living are the focus. In short, cut the cost, save money, and offer quality living appear to be in the new living focus.