Emerging Investment Opportunity
If you're looking to jumpstart or scale your real estate investing career, look to the Midwest market in 2024. It doesn't draw the same attention as hotter markets around the country, but the momentum it's building for fix and flips and rental properties is turning it into a powerhouse for long-term wealth generation for investors. With its combination of low cost of living and the cultural shift toward remote work, growing cities in the Midwest can attract new residents who may not have considered it an option in previous generations. This shift is just starting to make itself clear in the rental and housing markets, creating lucrative opportunities for investors ready to take action.
Cities like Grand Rapids, MI, and Omaha, NE, illustrate this trend well. There has been a dramatic surge in demand for rental properties in these communities, with occupancy rates driving toward 96%. This means that for every vacant unit, there are multiple eager applicants ready to accept the listed price and sign leases quickly. Demand like this gives property owners the opportunity to be selective in their tenants and can find safe, trustworthy renters for the long-term. This limits turnover and adds stability to your portfolio. This demand is statistically demonstrable in these markets, and many others around the country.
Economic Shifts and Lifestyle Choices
Economic and lifestyle factors also play a significant role in the move toward Midwestern urban and suburban neighborhoods. The lower cost of living in these communities has given renters and prospective homeowners additional disposable income, and bars, restaurants, and other amenities have taken notice. Residents no longer feel as if they have to be in the major American cities to get the experiences they are looking for. It's no longer a secret that the quality of life in smaller cities like Milwaukee or Minneapolis can exceed that of bigger metropolises where your dollar just doesn't go as far. This is compounded by the trend toward remote work, which has empowered employees across the country to break free from the traditional constraints of job locations.
From an investment perspective, these facts offer a compelling proposition. Properties here are also far more affordable than in other regions, which provides a lower barrier to entry for first-time real estate investment. If you have ever considered investing in residential real estate, targeting opportunities in the Midwest can be financially accessible and potentially lucrative.
It's true that new inventory has been added to the marketplace in recent years, which has slightly softened demand, but this is not inherently a bad thing. New builds are rarely occupied by renters or first-time homeowners who typically pursue investor-owned properties. When these new homes are added to a community, it often indicates the availability of older, potentially distressed assets that can be prime targets for the investor class.
Milwaukee's Market: A Case Study in Growth
Milwaukee is one such market where all these trends are clearly demonstrated. It is a growing economic hub with a strong culture and employment opportunities that draw the attention of many looking to move away from larger cities like Chicago. Coupled with the low cost of living and new entrants to the market who are looking to rent or purchase starter-homes have identified it as one of the top regions to move. The data shows that Milwaukee is positioned as the 3rd hottest rental market in the country. For investors, the combination of high demand, affordability, and shifting demographics make it an ideal location for those looking to launch their investment portfolio.
Show Me the Data
For a more comprehensive look at the dynamics that shape today's market, this data-driven blog about "America's Hottest Rental Markets in 2023" offers invaluable insights. It underscores the trends that we've anecdotally observed in the Midwest, but also offers a contrast to markets around the country. If a property in these regions catches your eye, submit a Loan Application with The Hard Money Co. to get the ball rolling on your real estate investment career. Understanding these factors as we move into a new year in an ever-changing market is essential for anyone serious about real estate investing and financing success in this competitive climate.