7 Multifamily Trends to Watch for in 2021
1. Class B Properties Remain the Most Stable Investment
Class B assets should continue to outperform in 2021 with low vacancy and steady rent growth as many are located in suburban areas and are affordable.
Class A properties saw a decline in vacancy and rent growth due to tenants moving back in with family but should see growth as the economy recovers.
Class C properties had steady vacancy rates but saw the most delinquencies in 2020.
2. Sunbelt cities will continue to thrive
When the pandemic hit, life in major metropolitan areas (NYC, LA, SF) came to a standstill. Many residents fled to outlying areas and even out of state to avoid sheltering in small apartments. Sunbelt cities seem a favorable option, offering nicer weather and more land space. Cities in Texas and Arizona will continue to see an uptick in migration in 2021.
Additionally, as more companies are allowing employees to permanently work from home, there will be a trend in people moving from densely populated and expensive areas.
3. The suburbs will continue to have their moment
The suburbs will continue to grow in popularity as millennials make a permanent exodus from larger metros in search of affordable rents and more space.
4. Class B and C properties will need more tech upgrades to compete
The largest renter populations - Millennials and Gen Z were raised on technology and will want access to in-unit apartment technology. Smartphone door locks, intercoms, thermostats, dimmers, and free internet are great connectivity upgrades.
5. Creativity is essential for resident connection
Community events will be key in 2021 but property managers will still need to be diligent with COVID safety.
Organizing community events with local vendors, conducting classes, or watch parties on social media and interactive contests will help residents feel a sense of connection despite sheltering at home.
6. It's time to up your amenities game
Residents increasingly expect multifamily communities to offer amenities that cater to their health and safety needs. Consider convenience amenities like package lockers, electronic car charging stations, dog runs and parks, pet wash stations, and fitness center upgrades.
7. Horizontal Multifamily is the next big thing in new multifamily development
This style of multifamily is small single structure homes with 1-2 bedrooms, typically in a gated community.
While these communities are desirable to renters they take up a larger portion of real estate so rent must cover the investment.