Dallas, TX secures the first spot in the US for providing the best returns on residential real estate investment this year, according to a recent study conducted by an online real estate firm, BiggerPockets. The city provided investors with the biggest returns in the US led mostly by increase in real estate values over the period of study.
Residential home values in Dallas increased by an amazing 13.4%, which represented the strongest appreciation in the US home values. A look at the Dallas Business Journal revealed that residential real estate values in the city stayed red hot throughout the year. Real estate in the city remained in top demand throughout the year.
The other cities in the list included Denver, CO, Miami, FL, Houston TX, Atlanta, GA, Tampa, FL, Detroit, MI, Austin TX, Las Vegas, NV, and Orlando, FL.
The above cities experienced positive trends as investors saw rents remaining strong relative to the market values. Investors in Denver earned nearly 20% returns on real estate investment before expenses. Similar was the situation in other US cities that topped the list of best returns for investors this year.
BiggerPockets that conducted the study is considered the largest online hub for real estate markets in the US today. The online company publishes Real Estate Investment Market Index that depicts real estate position during a specific period. Around 50 largest metro areas were analyzed by the company to determine areas that produced greatest returns in the residential real estate market. The most recent study was conducted for the period between 2014 and 2015.
Apart from the best performing real estate markets, the online company also releases data on the worst markets in the US for residential real estate investors. The most recent findings suggest that the northeastern part of the country offered low returns for the investors. The property values along with rents in the areas displayed negative appreciation during the time period of the study.
According to the company's findings, Hartford, CT provided the least opportunity for real estate investors in the US. During the period when most of the residential real estate values appreciated in the US, the city experienced a decline. The real estate values in Hartford metro area declined by about 2.2% over the period of the study.
Los Angeles, CA was also included in the list of the worst residential real estate market for investors. Although real estate values in the city appreciated by nearly 2.9%, the returns were nonetheless small as compared to other metro areas. The city showed extremely low rent-to-price ratios that resulted in meager income for real estate investors. Gross rental income of 3.5% was the third lowest in the US. Only San Francisco and Santa Clara offered less rental income to investors as compared to the city of Angels.
Other US cities that provided minimum opportunity for real estate investors during the period of study included Salt Lake City, UT and Louisville, KY.