Another Top 10 City List: Best Places to Invest in Rental Property
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Homevestors (We Buy Ugly Houses®) based on analyses completed by Local Market Monitor ranked cities selecting the top markets to invest in rental housing. They report current median home prices, forecast 2015 median home values, projected annual rent in 2015, and the premium of return in renting over the national average. Some of the findings were compiled at CNNMoney.
Their top markets and related statistics for the best 10 locales include:
The risk premium is that percentage greater than the national average of 5.0 percent.
The article does point out that the greater returns are associated with cities that had higher price declines, and that in the hardest hit markets, the more dwellings purchased, the greater the potential level of competition among landlords to rent.
Do I agree with this analysis? Without knowing their model or assumptions in forecasting 2015 rents and prices, it is difficult to replicate. But this is a starting point in sorting investment opportunities.
We do know that a continuing megatrend will be for more individuals to be renters than in the past.
And rents will continue to rise as demand climbs and new supply is muted by minimal construction.