Markets Set to Grow in 2017
A new study from RealtyTrac has look at the best markets in the United States to buy single family rental properties in 2017. The study was very comprehensive and offers investors and renters alike some useful information about where people are going and where the money is.
Let’s take a deeper look:
Methodology for Study
The study from RealtyTrac investigated the single-family homes in almost 400 counties in the United States. All of these counties had populations of at least 100,000. They also looked at 6,000 zip codes that had populations of 2,500 or more. Investigators only used the information from communities where they could determine the home and rental prices per the United States Department of Housing and Urban Development and ATTOM Data Solutions. Both have extremely high accuracy and are typically used in most studies.
Property Trends
If you look at the numbers below, you’ll see that good returns are harder to come by in the coastal markets while places in the rustbelt seem to have better traction for rental purposes in 2017. However, investing in rental properties on the coasts can be beneficial if the price of the property is low. This might mean it will be a time to flip properties instead of just investing in rentals. In some hot spots, now is the time to buy property as an investor – whether you want to rent them out, flip them quickly, or wholesale.
In almost all parts of the country, if you are investing in rental properties, you want to stick to single family homes. Home ownership rates continue to decrease, but there are more and more families looking for places to live as millennials break onto the market. Note that more and more investors are looking across the country, not just where they live.
Top 5 Counties with the Highest Single Family Rental Returns
The areas with the highest returns are:
- Clayton County, Georgia, in the Atlanta metro area
- Baltimore City, Maryland
- Bibb County, Georgia, in the Macon metro area
- Monroe County, Pennsylvania, in the East Stroudsburg metro area
- Saginaw County, Michigan
Bottom 5 Counties with the Lowest Single Family Rental Returns
The areas with the lowest returns are:
- Washington, D.C., metro area
- Williamson County, Tennessee, in the Nashville metro area
- Santa Cruz County, California
- Norfolk County, Massachusetts, in the Boston metro area
- Santa Clara County, California, in the San Jose metro area
Single Family Rental Markets that Expect Growth
Throughout the study, researchers also looked for counties that would have future growth of returns on single family rentals. This will give investors time to build relationships in these communities and start the search for houses to flip. In order to predict growth, they looked at places where the average weekly wages are growing by 5% annually and has a gross annual yield of 9.5% or more.
They include:
- Binghamton, NY
- Toledo, OH
- Philadelphia, PA
- Pittsburgh, PA
- Dayton, OH
- Sioux City, IA
- Springfield, OH
- Harrisburg, PA
- Atlanta, GA
- Dover, DE
- Pueblo, CO
- New York, NY
- Cedar Rapids, IA
- Minneapolis, MN
- Lincoln, NE
- Greenville, NC
For the complete list, see the interactive chart here.
Remember to always talk to a real estate professional about investing in new markets or when you first start your real estate investments.