Despite rising operating costs across the multifamily sector, many owners throughout California’s Central Valley are still reporting steady — and in some cases growing — income.
In this month’s Multifamily Market Update, Blake Blackburn discusses what’s driving that stability and how some investors are shifting their focus toward passive, income-generating alternatives.
Key Takeaways:
Since 2021, multifamily expenses have increased an average of 24%.
Owners with long-term tenants at below-market rents often see a “pop” in income when turnover occurs.
Many investors are exploring net lease options — such as retail, QSR, or medical office — for consistent, management-free income.
As the Central Valley continues to evolve, these trends highlight both the resilience of multifamily assets and the growing appetite for diversification among investors.
To explore alternative investment options or review your portfolio strategy, contact Visintainer Group today.
Full video transcript:
(0:01) Hey everyone, Blake Blackburn back again with another multifamily update — this time talking about income stability we’ve seen over the past few years as well as different investment options many multifamily owners are looking at.
(0:06) Since 2021, we’ve seen expenses grow on average by around 24%. However, many owners and operators are still reporting consistent, if not growing, income.
(0:25) Why is that? Many owners and operators have long-term tenants with below-market rents. When those tenants move out, they see a pop in income for that specific unit, which helps balance out their increases in expenses.
(0:37) For many though, the increases in expenses and the constant management are too much to bear.
(0:45) For these investors, a lot of them are looking at different options that provide a more consistent income with no management responsibilities — like net lease retail investments, quick-service restaurants, or medical offices — where in many cases the owners pay no expenses.
(0:57) As a result, they have consistent income with no management responsibilities. If you want to discuss different investment options that might suit your needs, feel free to give me a call.