Positive Net Migration to the Sunbelt Driving Up Apartment Demand
Multifamily real estate investors can find strategic advantages when they put on a demographer's hat. Population trends, specifically net migration to a state or metropolitan region, offer clues that can unlock value. Net migration refers to the total gain or loss a state realizes after adding and subtracting people who moved in and those who moved out. A location with a positive net migration has a higher chance of increased housing demand. 
Greater demand for a product, in this case apartments, translates into better returns on investment. For example, the Dallas Morning News reported on July 6, that out-of-state migrants to the Dallas Fort Worth area produced a surge in apartment leasing in the second quarter. Demand caused rents to rise by 7% in the DFW market compared to the year before. The article quoted the RealPage chief economist as saying that upward pressure on rent for luxury apartments created room for middle-market properties to raise their rents as well. 
The DFW market example highlights the growing markets in Sunbelt states, like Texas. Other warm states with strong economies are experiencing notable increases in population due to people shifting their lives away from major population centers on the coasts.
Why Do People Move?
Before digging deeper into the importance of net migration when evaluating a multifamily real estate deal, the reasons that people move bear consideration. Jobs are an obvious example. Greener pastures in thriving cities and suburbs will motivate recent graduates and those dissatisfied with their employment situation to move.
Housing affordability attracts migrants. People living in high cost of living cities, such as Seattle or Los Angeles, may choose to leave high rents behind in favor of less costly housing in Texas or Arizona.
Lifestyle factors play a role in some migration. Retirees may want a warmer place to live, or young professionals may want access to suburban schools when they wish to start families.
Lower taxes contribute somewhat to migration. This could be particularly true for people with higher incomes. Additionally, high-earners who run companies may relocate their headquarters to connect with tax advantages. 
Current Population Trends
Public and private sources supply data about migration that investors can analyze for greater insights about the best places to buy property. The U.S. Census, U.S. Post Office, Bureau of Labor Statistics, and even an annual survey by the U-Haul company about one-way truck rentals build a picture about who is moving where.
An April 2020 report from CBRE Econometric Advisors cited postal data that confirmed that the Sunbelt, specifically cities in the Southeast, continued to enjoy positive net migration. CBRA also noted that renters who moved tended to remain renters where they landed. 
The publication GlobeSt confirmed that mutifamily investors had certainly taken notice of migration to non-major metropolitan areas in the Sunbelt. In 2020, almost 70,000 residents of California moved to Arizona, Nevada, Utah, and Idaho where the cost of living is lower. As a result, emerging Sunbelt markets received record-setting investments in multifamily real estate. Non-major metros received 75.8% of apartment investments in 2020. 
How Strong Net Migration Equals Profits
Strong net migration is a good indicator that demand will be high for apartments. This demand improves occupancy and quickly enables rent increases. Good occupancy and rent growth could also make the real estate appreciate rapidly.
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