Don’t Get “Spooked” Out of the San Antonio MarketNov 01, 2022
Today we are featuring a special guest post from Kenneth Sumners of Sumners Capital.
Sumners Capital is a team with 20+ years of combined experience, we can help you and your family create the sustainable wealth you desire for retirement and beyond.
Currently, our portfolio is valued at $160MM with an ownership interest in over 1,400 doors. When you work with us, you’ll receive opportunities you won’t get with other syndications, along with the trusted advice from experts in the acquisition, repositioning, and sale of multifamily properties throughout Central Texas.
With all the doom and gloom around interest rates, Halloween is a perfect time to discuss why you should not be spooked out of real estate investing especially when you are targeting great markets. Don’t get me wrong there are bad deals out there but that provides all the more reason to focus your attention on quality markets. Today we will dive into my top 3 reasons why San Antonio is a great place to invest, even in the face of uncertainty around rates.
1. Population Growth
When investing in real estate, you want to ensure you are putting your money into markets where the population is not shrinking, best case you target areas of large population growth. The reason why is surprisingly obvious, when more people are moving to an area the demand for housing and rentals goes up. You see the inverse as population growth declines, fewer people equals less demand for housing.
San Antonio absolutely dominates the population growth category. Recently San Antonio was observed to have one of the highest population growth rates in the country. This is wonderful news for investors looking for opportunities within San Antonio. The strong population trends help reinsure the demand for multifamily properties. Even if rent growth slows down, strong population growth helps drive high occupancy rates and cash flow to the business.
2. Job Growth
You need more than just a heavily populated city, you always want to ensure those individuals have the capital required to afford the average rents in the area you are buying. This is fueled by job growth in sectors that pay higher than average. San Antonio has great job growth and it is in a variety of sectors that are all continuing to expand. This is great because it allows the community to be strong even if some sectors take minor dips. For example, San Antonio has seen a massive increase in Tech related jobs, even if that industry were to slow down there is still strong growth in other sectors like Government, Trade, and Travel. This helps ensure you won’t have a mass exodus of renters because there are so many industries doing well in San Antonio that even in tough times renters should be able to afford rent.
3. What are your alternatives?
Another reason San Antonio, and multifamily in general is a wonderful investment is it performs very well relative to other investments. Keep in mind I’m no financial advisor, but on average multifamily typically outperforms the stock market in uncertain times. As rates increase, we are seeing sellers adjust prices to meet buyer expectations, and while this has slowed the number of deals I’m seeing, there is still plenty of money to be made when exploring multifamily opportunities. As inflation continues to be an issue, it is important to do something with your capital so you aren’t just losing money in the bank. I’ve found that investing in strong markets, like San Antonio, allows me to find quality deals and offer great returns for my investors.
Want to learn more about why I love investing in San Antonio? Let’s jump on a call and I can let you know about my upcoming projects and answer any questions you might have.