Is South King County Good for Investing in Multi-Family Units in 2023?

It’s time to get serious about your investment portfolio. If your current investments are lacking a real-estate component, you are missing serious opportunities for profit. Investment groups and savvy individual investors alike see a solid return on investment when they acquire multi-family investment properties in desirable markets.

Many people shy away from real-estate investments because they do not desire to commit the time and resources to become a landlord. Luckily, daily operations do not have to fall directly onto the owner’s shoulders. A property management company may be the perfect way to maintain your investment and your free time.

Powell Property Management has over a century of experience in keeping multifamily investments profitable and properly maintained. Our team finds and places quality tenants and keeps them happy with responsive services like 24/7 emergency maintenance and next-day response to non-emergency matters. We’re pleased to discuss the ins and outs of investing in multi-dwelling units in our South King County service area, especially if it gives you the confidence you need to get started with your investment.

What is a Multifamily Unit?

A multifamily property has one mortgage but more than one complete living space. Each unit has a private entrance, utility meter, kitchen, and at least one bathroom. Though smaller properties like duplexes, which are two homes that share a common wall, are technically multi-family units according to this definition, federal laws regarding multifamily units sometimes apply only to units of five or more dwellings.

Why is a Multifamily Property a Superior Investment?

Multifamily investments provide multiple income streams because each tenant pays rent. This mitigates the risk of a month with no income because it is unlikely your tenants will all move or require major repairs at once. This keeps your income relatively steady and protects your monthly NOI (net operating income) against the typical woes landlords face with unpredictable tenants.

How do You Know if a Multifamily Building is a Good Investment?

Assessing a multi-family building as an investment prospect is crucial to finding the right one. With properties staying on the market an average of 8 days in King County and 2022, timely and decisive evaluation is required.

• Location- Washington's hottest real estate market is in Seattle and the surrounding area. Finding a suitable multi-dwelling unit in a desirable area is one of the most important first steps in multifamily investment. Look for a multi-dwelling unit in a prime location with nearby amenities.
• Inspection- Your inspector will help you evaluate your potential investment to ensure everything is in good working order. Forecasting potential repairs and expenses can help you evaluate whether this investment will be suitably profitable.
• Previous Owners- Why is this unit for sale? Was it properly maintained? Was it profitable? Information about the building’s history is crucial for evaluating its future.
• Local Economy- Multifamily housing markets are desirable in locations with indicators of robust economies, such as low unemployment rates and stable or growing populations. Granular data is your friend in identifying the hottest places within a local market.

What Makes a Good Multifamily Unit Market?

Solid multifamily housing markets have steadily rising rent, which is the case in King County, with rent rising well over ten percent year over year. Excellent rental markets give landlords the choice of quality tenants with multiple showings and applicants. Many markets with these conditions have low rental inventory, which makes entering the multi-family market competitive, but rewarding for the winning bid. 

Many investors have successfully purchased off-market multifamily homes by connecting the real-estate agents in-the-know about upcoming properties, or local communities of real estate investors. Making an offer on a property that is not yet for sale may pay off for bold investors in a market with short supply.

Multi-Family Rental Market in South King County

The Seattle rental market is strong and growing, with residential properties rising 3.2 percent in value in 2022 according to Redfin. Last year, rent in King County increased by as much as 20 percent in some neighborhoods. A guide from the King County Housing Authority can help you legally assess and address rent increases according to the jurisdiction in which your property is located. Many renters are expanding their search outside of the Seattle city limits, making properties in Burien and other South Sound cities increasingly attractive.

Powell Property Managers Protect Your Investment

Powell Property Management has been operating profitable multi-family homes in South Sound for more than 100 years. Our expertise protects your time and investment and supports tenants with responsive and knowledgeable services. Reach out today to talk about what property management can do for you.

Sources

“Apartment Building Management Tips.” BiggerPockets blog post. Accessed online at https://www.biggerpockets.com/blog/2008-06-02-apartment-building-management-tips

“What Are the Duties of a Resident Manager of an Apartment Complex?” Career Trend article. Accessed online at https://careertrend.com/duties-resident-manager-apartment-complex-5616.html

“7 Mistakes of the Newbie Apartment Building Investor.” BiggerPockets blog post. Accessed online at https://www.biggerpockets.com/blog/2014-03-31-mistakes-newbie-apartment-building-investor

“7 MISTAKES NEVER TO MAKE WHEN BUYING AN APARTMENT BUILDING.” 100Units.com Post. Accessed online at https://www.100units.com/7-avoidable-mistakes-buying-apartment-building/

“6 Common Property Management Mistakes.” American Apartment Owners Association. Accessed online at https://www.american-apartment-owners-association.org/property-management/remodel-and-repair/6-common-property-management-mistakes/

“Nine Costly Mistakes Property Managers Can Avoid Making.” Forbes Magazine. Accessed online at https://www.forbes.com/sites/forbesrealestatecouncil/2019/06/14/nine-costly-mistakes-property-managers-can-avoid-making/#3dc299f5128b