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How Hipsters Help Returns

National Multifamily

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While hipsters' influence on facial hair and flannel is undisputed and well documented, their sway on rental returns has flown under the radar (on a reclaimed, organic bicycle, of course).

How Hipsters Help Returns

How many zip codes are hipster heavy with strong rental fundamentals? Just 83 around the country, with the top 25 featuring gross rental yields above 4.5%, RealtyTrac VP Daren Blomquist tells us. The top five include both mustache meccas and dark horses: Saint Paul (13.98% gross rental yield), Pittsburgh (10.84%), Norfolk, Va. (7.96%), Minneapolis (7.76%), and Alexandria, Va. (7.66%). To find these hyper-local markets, Realtytrac used census and real estate data to home in on hipster lifestyle indicators. They focused on markets with at least 20% of the population aged 25-34 (versus 13% nationally); at least 20% of people walking or using public transit (versus 7.7% nationally); at least 50% of the market renting (versus 35% nationally); and 5% vacancy or below, Daren says.

How Hipsters Help Returns

It's important to note that a big influx of this younger generation into a neighborhood can very rapidly increase home values, he says. A good thing if you already own, but dicey if you're getting in late. The best bet for investors would be to find a market still on the fringe, where home prices haven't increased, he says. These are usually adjacent markets getting a lift from neighboring uber-cool 'hoods, teeming with up-and-coming Mumfords and virtually no vacancy. Another trend to note: As hipsters age, have families, and are looking to buy, these same rental opportunities could make profitable condo conversions and sales down the road.

Related Topics: Saint Paul