By David Nelson
To the general public, Reno, Nevada, conjures up visions of casinos, nightlife, giant neon signs and vintage mid-century motels, as well as the beauty of nearby Lake Tahoe. In the multifamily investment world, the metro is drawing increased attention because of its limited incoming supply, steady population growth, business-friendly environment and diversified employment base, which combine to create a strong apartment market that can deliver attractive returns.
Reno, which calls itself “The Biggest Little City in the World,” may not be on investors’ radar as prominently as some larger metros. But for those looking for a fundamentally sound market that is well positioned to deliver across market cycles, the Western Nevada city is one to consider.
A Diverse Economy
In terms of its demographics and economy, there are multiple reasons to believe that Reno will experience strong renter demand for the foreseeable future.
To start with, the metro has experienced steady population growth, partly because of migration out of higher-cost regions like California. From 2010 to 2024, the metro area’s population grew by 18 percent to approximately 361,000 residents.
The population growth is sustainable because of Reno’s diverse economy. The tourism and hospitality industries are still major employers in the area, but sectors such as technology, clean energy, logistics, data centers and manufacturing have expanded rapidly.
The area is home to the 107,000-acre Tahoe-Reno Industrial Center (TRIC), the largest industrial park in the world. Companies at TRIC include Tesla, Google, Apple, Amazon, Walmart, Home Depot, PetSmart, Patagonia and Panasonic.
The metro has also become a magnet for startups, and its proximity to major Western markets and major transportation corridors, such as I-80 and U.S. 395, make it a growing location for distribution, logistics and ecommerce operations.
Companies and individuals are drawn to Reno because of its business-friendly regulatory and tax environment. Nevada has no corporate or personal income tax, and it doesn’t have franchise or capital gains taxes, either. Moreover, institutions such as the University of Nevada, Reno, create a sizable pool of skilled graduates for local businesses and industries.
The cost of homeownership in Reno is another reason to believe that the demand for apartment living will remain strong. Home prices in the metro have increased dramatically since COVID.
In 2021, a three-bedroom home was priced at approximately $464,000. By 2025, the average price had jumped to $554,000. Households now need to earn around $197,000 annually to afford a home in the Reno area, further reinforcing strong rental demand for multifamily properties, particularly in the Class B segment of the market.
Healthy Market Dynamics
Digging into the multifamily market itself, operating fundamentals in Reno are poised to benefit from the limited incoming supply, prohibitively expensive cost of home ownership and robust in-migration of affluent demographics.
According to Marcus & Millichap, fewer than 400 new units will be delivered in the metro area in 2026. That number would mark the lowest annual total in more than a decade and would represent less than one-fifth of 2025’s total. This slowdown will provide ample opportunity for recently delivered units to be absorbed.
CoStar projects the metro’s vacancy rate to end this year at 6.5 percent, down from 7.5 percent at the conclusion of 2025 and just less than 9 percent in December 2024. The average effective rent reached a record high of $1,750 last year and should rise by another 2.3 percent in 2026, according to Marcus & Millichap.
As for investment sales, 10 apartment communities changed hands in 2025, compared with eight in 2024 and nine in 2023, according to CoStar. The average price per unit was $208,000, according to Marcus & Millichap.
“Private buyers accounted for most of the activity, with B and C properties built after 1960 representing most trades,” the report says. “In-state investors led in transaction count, while California buyers dominated in total dollar volume, reflecting tighter regional concentration. Cap rates remained elevated, relative to the past five years, allowing investors to continue acquiring assets at attractive entry points.”
A Hidden Gem
When thinking about appealing metros for multifamily investors, Reno certainly has a lot to offer: a growing and diverse economy, a healthy balance between supply and demand and attractive investment sale pricing.
Add it all up, and apartment properties in Reno are often positioned to deliver consistent, targeted returns to sponsors and their investors. This is definitely a market to keep an eye on.
— David Nelson is president and chief investment officer at San Francisco-based Hamilton Zanze,a multifamily real estate investment firm.