With recent demographic shifts in today’s homebuyers and renters, an emphasis on co-living opportunities has made multi-family homes an attractive choice among consumers. As such, several cities are actively encouraging multi-unit building construction through:
- Incentive programs
- Relaxed zoning codes
- Simplified review processes
Due to growing demand and added incentives, it’s no wonder multi-unit builds have quickly become a profitable endeavor for builders and investors. However, to succeed in today’s markets, investors must know the best areas for multi-unit builds–based on local market trends and demand. Researching and identifying lucrative investment opportunities helps investors and builders mitigate risk while increasing profit potential before ever breaking ground.
In this article, we’ll discuss what to look for to identify profitable multi-unit build markets. Then, we’ll spotlight the hottest areas for multi-unit building throughout the US. Let’s dive in:
In this article, we’ll discuss what to look for to identify profitable multi-unit build markets. Then, we’ll spotlight the hottest areas for multi-unit building throughout the US. Let’s dive in:
Researching Local Markets
A successful multi-unit building investment plan is unattainable without adequate market research. To find the best real estate investment markets, multi-family home investors must pay attention to several economic factors that influence market demand, including:
- Job Growth: A thriving job market attracts consumers into a city’s rental and homebuying markets.
- Economic Stability: A bustling economy mitigates any risks of sudden, unexpected downturns.
- Residential Growth: Is the area growing in population year-over-year?
- Strong Rental Demand/Low Vacancy Rates: Is the rental market hot? High demand translates to higher yields, lower vacancy rates, and less risk.
- Property & Rent Appreciation: Are the values of properties and rent costs in the area growing? This is essential for long-term investment success.
With these in mind, let’s look at the 3 hottest areas for multi-unit builds based on economic factors and local incentives.
Best Multi-Unit Builds Markets
New York, New York
New York City at a glance:
- Median Home Price: $867,439
- Home Appreciation Year-over-Year (YoY): 3.90%
- Median Rent Price: $4,475
- Rent Appreciation YoY: 3.91%
- Rent Growth: 5.50%
- Lease Renewal Rate: 60.9%
Demand for multi-family housing continues to skyrocket, with a staggering 5.50% rent growth rate YoY. As one of the largest and most widely recognized metropolitans in the United States, New York maintains job and economic growth year in and year out.
To combat rising rental costs, over the last two years New York City has rolled out several incentivized programs for investors to encourage new multi-unit builds. These include:
To combat rising rental costs, over the last two years New York City has rolled out several incentivized programs for investors to encourage new multi-unit builds. These include:
- 421-a Tax Exemption Program
- 80/20 Housing Program
- Geothermal Energy Incentives
Additionally, in December 2024, the city approved its “City of Yes” plan, aiming to construct 80,000 new housing units over the next 15 years. With this program, New York modified zoning regulations to help builders and simplify approval processes.
Whether you’re looking to build and rent or sell a multi-family unit, New York City’s allure, incentives, and plans for real estate growth make it the top investment destination.
Whether you’re looking to build and rent or sell a multi-family unit, New York City’s allure, incentives, and plans for real estate growth make it the top investment destination.
Columbus, Ohio
Columbus at a glance:
- Median Home Price: $285.399
- Home Appreciation Year-over-Year (YoY): 2.14%
- Median Rent Price: $1,450
- Rent Appreciation YoY: 6.19%
- Rent Growth: 8.82%
- Lease Renewal Rate: 61.0%
Columbus, Ohio is one of the country’s fastest-growing and most affordable cities, with housing 8.1% less expensive than the national average. The affordability and growing job market of Columbus, with large healthcare, social assistance, and education sectors, make it an attractive destination for young professionals and families.
For long-term multi-unit building investors, Columbus’ numbers speak for themselves. With a staggering 6.19% rent appreciation YoY, nearly 9% rent growth rate, and 61% lease renewal, Columbus has been identified as a lucrative and successful market for long-term investors. Additionally, the city is working to expand housing efforts through community reinvestment area programs and affordable housing bonds that support multi-family builds throughout the city.
For long-term multi-unit building investors, Columbus’ numbers speak for themselves. With a staggering 6.19% rent appreciation YoY, nearly 9% rent growth rate, and 61% lease renewal, Columbus has been identified as a lucrative and successful market for long-term investors. Additionally, the city is working to expand housing efforts through community reinvestment area programs and affordable housing bonds that support multi-family builds throughout the city.
Indianapolis, Indiana
Indianapolis at a glance:
- Median Home Price: $235,000
- Home Appreciation Year-over-Year (YoY): 2.2%
- Median Rent Price: $1,400
- Rent Appreciation YoY: 3.5%
- Rent Growth: 9.11%
- Lease Renewal Rate: 59.0%
Another affordable and growing metropolitan, Indianapolis continues to attract renters with a median rent price 29% lower than the national average ($1,576). The city is quickly becoming an employment hub with several Fortune 500 companies coming to town, including Amazon and FedEx. And, Indianapolis has a superb public transportation infrastructure, positively impacting tenant retention (59.0%).
As for incentives for investors, the city and state provide various perks to new construction multi-unit buildings, including:
As for incentives for investors, the city and state provide various perks to new construction multi-unit buildings, including:
- Tax Abatement to significantly reduce property taxes
- Rental Housing Tax Credits (RHTC)
- Development Funds offering loans or grants of up to $750,000 to multi-family home developers.
- Tax-Exempt Bonds to facilitate lower financing for affordable housing projects.
- With ongoing city growth, an expanding job market, and a booming rental market, it has never been a better time to invest in Indianapolis real estate ventures.
Finding the Right Financing Partner
Whether you’re building to sell or rent, multi-unit builds have endless financial opportunities in today’s renter-friendly markets. In order to succeed in the fast-paced real estate investment industry, investors and builders must find reliable and accessible financing.
For the last decade, CIVIC has provided savvy multi-family home investors with the lending agility, speed, and freedom needed to outpace the competition and achieve financial prosperity. We deliver reliable financing options with flexible terms and rates, investor-friendly repayment options, and round-the-clock expert support.
For multi-unit builders and investors, CIVIC Ground-Up Construction loans offer:
For the last decade, CIVIC has provided savvy multi-family home investors with the lending agility, speed, and freedom needed to outpace the competition and achieve financial prosperity. We deliver reliable financing options with flexible terms and rates, investor-friendly repayment options, and round-the-clock expert support.
For multi-unit builders and investors, CIVIC Ground-Up Construction loans offer:
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- Flexible short-term options
- Up to 100% of construction budget financing
- No pre-payment penalties
- 1-4 non-owner occupied unit residential, townhomes, and condos
CIVIC also offers Single Rental and Rental Portfolio refinancing options for long-term investors looking to build and then rent.
CIVIC’s loan programs are available in 44 states throughout the United States, making us an accessible and viable option for nearly any multi-unit new build market. With a team of industry experts, CIVIC is here to help guide you through the new build process–helping to simplify approval procedures and take advantage of incentivized city and state multi-family home new build programs.
If you’re ready to take advantage of the booming multi-unit building market, let our team at CIVIC help navigate you to financial success. CLICK HERE to schedule a FREE consultation with a CIVIC team member today.
CIVIC’s loan programs are available in 44 states throughout the United States, making us an accessible and viable option for nearly any multi-unit new build market. With a team of industry experts, CIVIC is here to help guide you through the new build process–helping to simplify approval procedures and take advantage of incentivized city and state multi-family home new build programs.
If you’re ready to take advantage of the booming multi-unit building market, let our team at CIVIC help navigate you to financial success. CLICK HERE to schedule a FREE consultation with a CIVIC team member today.
