An article in RisMedia has examined a report from RealtyTrac which shows the best places in which to buy rental property during the first quarter of this year. The Residential Property Rental Report looks at which areas are showing the largest increases in rental rates compared to last year, and also identifies the best markets in which to rent homes to Baby Boomers, people in the Generation X age group and Millennials.
At the moment home ownership rates are currently at their lowest level for twenty years. At the same time, new housing starts and real estate prices are still relatively low in many parts of the country, providing plenty of opportunity for investors to purchase rental property. Real estate experts feel that by identifying particular markets, investors will be able to find options that will provide solid rental returns. Some markets no longer offer these types of opportunities due to rapidly rising prices over the past few years, and investors who do wish to purchase property in these areas are being advised to proceed with caution.
In the report, RealtyTrac has analyzed the median sales price for single family homes and for condominiums alongside the average rent for these properties and rates of unemployment in the area. The whole report looks at a total of 516 counties and found the average rental return for residential properties was 9.04% for the first quarter of this year, compared to 9.06% for residential properties purchased during the third quarter of last year.
The best areas for purchasing residential rental properties were identified as being Georgia, Maryland, Michigan and Maryland. The highest rate of return was found to be in the Atlanta metro area at 25.83%.
Anyone looking to buy rental property for Millennials is advised to look at Seattle where many of this age group enjoys stable employment as well as good prospects for career and future salary growth. At the moment rental rates are rising and vacancies are low. The growth in Seattle technology sector looks set to continue providing investors with a built in clientele.
The best markets for Generation X and for Baby Boomer renters were identified as being in Ohio. Over the past few years property prices in the Ohio area have been relatively stable which has led to increased demand for housing and good jobs growth. Many developers are still recovering from the recession and are not keeping up with demand for new homes which is expected to lead to continued rises in rental returns for this year.