Why Location Still Rules in Multifamily Investing

In real estate, you've probably heard the phrase repeated like a mantra: “Location, location, location.” And while trends in technology, remote work, and property amenities continue to shape the multifamily landscape, location remains the most critical factor influencing an investment’s performance.

Whether you're an experienced investor or just exploring passive real estate opportunities, understanding why location still reigns supreme will help you make smarter, safer, and more profitable decisions—especially in 2025’s competitive market.

1. Demand Follows Location, Not Just the Building

Regardless of how well-designed or updated a property is, it cannot outperform a poor location. The most successful multifamily investments are located where people already want to live—near major employment centers, good schools, accessible transit, and local amenities.

According to the National Apartment Association, multifamily properties within one mile of job centers or public transit saw 12–15% stronger rent growth and occupancy rates in 2024 compared to properties in less accessible areas.

Key takeaway: A modest property in a strong location often performs better than a luxury property in a struggling one.

2. Location Impacts Rent Growth and Tenant Quality

Rent prices and tenant profiles are deeply tied to the local market. Desirable neighborhoods attract higher-income renters, reduce turnover, and allow property owners to command stronger rents.

In growing cities like Raleigh-Durham and Nashville, Class B apartments saw annual rent increases of 6–8% in 2024 due to job growth and in-migration. Properties in these markets also enjoyed lower vacancy rates and more consistent collections.

By contrast, properties in areas with weak economic fundamentals often experience high turnover, payment delays, and longer vacancy periods.

Key takeaway: Long-term rental performance is closely tied to the surrounding economic and demographic environment.

3. Appreciation Is Driven by Market, Not Just Property Improvements

While upgrades and renovations can add value to a property, the broader real estate market determines the baseline for appreciation. In multifamily investing, location-specific factors—such as population growth, infrastructure development, and demand-supply balance—play a far more important role in increasing property values over time.

CBRE’s 2025 U.S. Market Outlook highlights how secondary markets with expanding job sectors are outperforming coastal cities in appreciation, due in large part to affordability and lifestyle migration.

Key takeaway: Investing in the right market positions you for long-term equity growth—even without aggressive renovations.

4. Location Strengthens Your Exit Strategy

An often-overlooked benefit of investing in the right location is the ability to exit on favorable terms. Properties in desirable areas attract more buyers, often sell faster, and command stronger valuations. This also opens the door to refinancing with better loan terms or selling to institutional investors seeking well-positioned assets.

Even during market slowdowns, assets in strong locations tend to retain value and liquidity better than those in less desirable areas.

Key takeaway: Good location provides not only income and appreciation—but also flexibility and security when it's time to exit.

5. The Cost of Ignoring Location Can Be High

Pursuing high-yield opportunities in low-growth or declining markets may seem attractive at first glance, but it comes with risks. Properties in weak locations often suffer from higher vacancy rates, collection issues, and stagnant or declining rents. These factors can erode cash flow and make refinancing or selling far more difficult.

In past cycles, the properties that struggled most were not necessarily the oldest or most under-managed—they were those located in areas with poor fundamentals.

Key takeaway: Cash flow is only meaningful if the market can sustain it. Location determines sustainability.

What to Look for in a Strong Multifamily Location

When evaluating markets in 2025, here are key indicators of a location worth investing in:

• Steady population growth
  
  
• Job diversity and employment expansion
  
  
• Local infrastructure investment
  
  
• Strong public schools and low crime rates
  
  
• Rent growth above the national average
  
  
• Vacancy rates below 6%
  
  
• Proximity to hospitals, universities, or transportation hubs
  
  

These factors are the foundation of resilient and profitable multifamily assets.

Final Thoughts

While strategies, amenities, and management styles may evolve, one principle in multifamily investing remains timeless: location is the foundation of every successful deal.

You can improve a property’s units, update its branding, or streamline operations—but none of that can compensate for being in the wrong market. On the other hand, a well-located property has built-in advantages that enhance income, attract quality tenants, increase appreciation, and provide flexibility for your exit.

At Blue Vikings Capital, we evaluate every investment through the lens of market fundamentals and location dynamics. Because when you invest alongside us, you're not just buying real estate—you’re buying into the long-term growth of a strong, stable community.

Interested in learning more about passive investment opportunities in top U.S. markets? Visit www.BlueVikingsCapital.com to get started.