As we look forward to what the quickly approaching New Year has to hold for the rental property industry, we need only look at the fact that in 2013, developers have added the largest number of multifamily units since late 2009.

It’s for this reason that even independent research firmMPF Research reports that the apartment industry’s performance through the midway point of the year has been both in “strong demand” and experiencing an “accelerated rent growth.”

One of the biggest factors to play a role in the growth seems to correspond with the fact that the technology sector seems to have the ability to drive development.

As a matter of fact, of all the individual markets in the country, all three of the industry’s leading locations have had two major things in common, they’re on the west coast and the tech industry has recently begun moving in.

Top Markets for Rent Rate Growth

• Statistically speaking, the top markets seeing the most growth are:
• San Jose can expect a 5.3% growth in 2013 and 2.8% vacancy
• Seattle posted 5.2% growth this year and only 3.8% vacancy
• San Francisco has also seen growth of 5.2% but an average monthly rent of $2,498 and a vacancy rate of only 3.2%

Rounding out this year’s top ten markets we’ve got:

• Minneapolis with 5% growth and only 2.4% vacancy
• Dallas with 5% growth and 5.4% vacancy
• Denver with 4.9% growth and 3.9% vacancy
• Portland has seen 4.7% in growth and only 3.3% vacancy
• Houston can expect 4.6% growth in 2013 and 7.1% vacancy
• Fort Lauderdale can also expect 4.6% growth this year and only 4.1% vacancy
• Austin makes the top ten with a similar 4.6% growth and 4% vacancy

Top New Markets for Rental Property Growth

While the above markets have seen rental rates go up and vacancy rate go down, the following markets are different in that they are markets that have several elements working in their favor to put them on our list.

•  Las Vegas, NV: When a market is hit as hard as this one was with foreclosures, it only makes sense that the demand for quality rental property increase. With an average vacancy rate of 8.6% and an average rent of only $803, Las Vegas, along with its 3% increase in employment over this time last year, Las Vegas has bottomed out and has no place to go but up.
•  Orlando, FL: Even though the area has only had a boost in rents of 0.2% in the last year and has a vacancy rate of 7.9%, the rent here is falling in the $871 range. The area was in the process of converting existing property into condominiums, but after the market turned its left a lot of property priced cheap and ready to go.
• Colorado Springs, CO: This beautiful city isn’t seeing rents go up, but they are seeing their inventory go down. As a matter of fact, with an average rental rate of only $713 per unit and a vacancy rate of only 5.3%, the nearby military bases and Air Force Academy is keeping a steady flow of government employed renter interested.
• Memphis, TN: While other markets have lower vacancy rates, Memphis’ 11.2% is the nation’s highest. So why did it make the list? It’s because Memphis has an average rental rate of only $682 and a long history that includes everything world renowned barbecue and basketball to the blues on Beale Street.
• Houston, TX: They say everything is bigger and better in Texas. Well, when they’re talking about investing in the rental market, they’d be right about Houston. This city is not only experiencing average rents right around $792, but there is room to grow. Rates are up 2.1% in the last year and unemployment has dropped below 8% putting investors in Houston in a good position to attract quality renters.
• Columbus, OH: This college town is ideal for rental investors in that it’s packed with college kids, has a vacancy rate of only 8.6%, and rental rates that are affordable at only $690 on average. Add to the mix the fact that the area has below average unemployment rate of 7.3% and on anyone’s tally, Columbus is a winner.
• Phoenix, AZ: With average rents being only $755 and a vacancy rate that’s hitting 8.9%, the units here are affordable and there are just enough units available to keep the area competitive. When it comes to investing in the “sun” city the factors that are making the most impact are, like Columbus, Phoenix is a college town. Arizona University keeps not only students in the area most of the year, but those employed by the university as well. In addition, those stationed at the Luke Air force Base and the added attraction of having all the major professional sports represented makes living in the area attractive.

What other markets are you seeing starting to trend for rental growth?