Top 5 Cities to Watch for Multifamily Investing in 2025

When markets are volatile, the difference between winners and losers often comes down to city selection more than deal-level finesse. Based on recent rent trends, demographic shifts, supply dynamics, and economic resilience, here are five cities we believe deserve serious attention in 2025.

1. Chicago, IL

Chicago continues to show strength in rental demand. RentCafe recently named the Chicagoland area a “red-hot rental market.”

• The metro offers deep liquidity, institutional interest, and diversity of property types.
• Pricing is still more forgiving compared to coastal metros, which allows room for value-add upside.
• Risks: property taxes, regulatory pressures, and variable neighborhood performance.

2. St. Louis, MO

St. Louis is gaining traction as a Midwest rental growth engine. It’s been cited for ~6.1% year-over-year rent growth in some reports.

• Strong affordability gives it defensibility in down cycles.
• It offers a favorable mix of supply discipline and stable demand.
• Risks: supply pipeline creep, limited institutional yield compression.

3. Columbus, OH

Columbus often shows up on “best under the radar” lists - and for good reason. It’s affordable, growing, and has institutional appeal.

• The presence of universities and a diversified job base keeps demand steady.
• Entry pricing is competitive relative to growth markets.
• Challenges: moderate rent growth expectations and moderate upside.

4. Minneapolis, MN

Minneapolis is getting renewed attention. It’s been named a top city for renter activity in 2025, especially in the Midwest context.

• Demand is balanced, supply is not overly aggressive, and income dynamics support rental growth.
• It’s also less volatile than many “sunrise” metros.
• Risks: cold weather market, slower migration vs warmer Sun Belt markets.

5. Omaha, NE

Omaha is quietly rising. According to some mid-2025 rent reports, it posted ~3.6% annual rent growth and is expected to reach ~4.1% by year’s end.

• It combines affordability, steady growth, and limited overbuilding.
• It’s often overlooked—giving more room for upside to surprise.
• Risks: lower upside ceilings, less institutional deal flow, and modest scale.

Key Themes & Things to Underwrite

Insight for 2025 Underwriting:

- Midwest strength: The Midwest posted ~6.1% rent growth in H1 2025, outperforming many coastal zones.

- Supply discipline: Markets that avoid overbuilding tend to outperform in soft cycles.

- Affordability as defense: Cities where rent-to-income ratios aren’t extreme have more cushion.

- Operational execution matters: Even in growth markets, poor management or expense overruns can erode gains.

- Exit optionality: Look for cities with institutional exit depth or multiple buyer classes.

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