For real estate investors looking for new, profitable markets, Texas offers some untapped opportunities. So does Florida. RealtyTrac and RentRage identified the 25 hidden-gem, single-family rental markets across the country, and they’re all in 15 states no farther west than Texas.
The companies analyzed national housing data of three-bedroom single-family homes to produce the list, which is limited to counties with populations of 100,000 or more. They compared properties by gross rental yield (gross annual rental income divided by property purchase price or market value) and the properties’ expected return on investment. Within the top 25, investor purchases made up 5% or less of residential sales May through July, and unemployment rates were at or below 7.5%. The national unemployment rate is 7.3%.
Rental property can be a great investment, but it can also be a costly one, so finding a market to maximize profit can be crucial to success. This is especially true for individuals or smaller institutional investors, who may be dealing with inventories dominated by big buyers, according to Daren Blomquist, vice president at RealtyTrac.
“With this analysis we’ve identified the top overlooked markets where single family rentals still make good financial sense but where there is little to no competition from the big players,” Blomquist said in a news release about the report.
States with counties on the list include Texas, Oklahoma, New York, Tennessee, Florida, Louisiana, Pennsylvania, Ohio, Missouri, Kansas, Michigan, Maryland, Connecticut, Virginia, Wisconsin and Alabama. Texas and Florida each had three counties on the list, while New York, Pennsylvania, Ohio, Missouri and Alabama each had two.
On the opposite end of the spectrum, Georgia counties dominate the most investor-saturated markets, as determined by a report analyzing the same data.
We’ve listed the top 10 rental markets out of the 25 identified in the report, including the metropolitan statistical areas within the ranked counties. [AOL Real Estate has added homes listed for sale in those markets in the $100,000 to $200,000 range.]
HIDDEN GEM RENTAL MARKETS: