If you have some money to invest and want to get a quick and steady income out of it, you should definitely consider buying rental property. As easy as it sounds, there are a lot of things to consider before entering the real-estate business. You want to protect your investment and make sure the city you’re considering for buying rental property will keep on growing, which means you won’t have problems finding tenants able to pay a good rent, so you can turn up a decent return on your investment.
Before looking at the hottest rental property markets let’s have a quick look at the main factors you need to keep in mind before committing to a sizable investment.
Crucial factors that define a good rental property market
Finding the right house to buy is the most important part of becoming a landlord, but first you have to consider the city and its economic perspectives for the foreseeable future. Here is what you need to look at.
You want to enter a market with affordable housing, otherwise you’ll have a hard time making a profit. Large cities on coastal areas are hugely overpriced in terms of housing, so your chances of recuperating the original investment are rather slim, let alone making a quick buck. Use the Zillow Home Value Index to asses the value of the properties in the city you’re considering making an investment. You might want to check their figures against the Redfin Estimate, which boasts a larger database.
A city that is suffocated by a high unemployment rate is not the place you want to invest your money. You need a city with a steady economic growth, which means more jobs available and better wages. The more your future tenants make the more money they will be willing to pay as rent.
This factor is directly linked with a steady economic growths. The more jobs become available in a an area the more people will be interested in relocating to that city, needing, obviously, a place to live.
Property value trends
This is easy to check out if you do a bit of research. Many real-estate agencies typically offer data on property value trends for the previous years, as well as estimates for the immediate future.
Once you have a clear picture of the situation of the whole city you can start looking for the best neighborhoods, the most prized residential areas, those who offer easy access to downtown attractions – like shopping malls, restaurants, and amenities. Also keep in mind your future tenants will be interested in a property that has good schools nearby.
Best rental property markets in 2020
The city has seen a sustained growth for the past few years. Not spectacular, but steady, which is very important from a landlord’s point of view. Market analysis indicate that 55% of the occupied dwellings in Atlanta are rental property, also a very good sign for you.
Rental yield, maybe the essential factor for you, stands at 9.64% for the houses in the city center. Moving a bit away from the busy city center, the rental yield goes up to 12.64%, so check out those residential areas before committing to an investment.
The City of Trees is one of the hottest real estate markets at the moment and, according to experts, this is just the beginning. Boise is slated to become the next Silicon Valley with many high-tech companies moving to this city. And this means jobs, high-paying jobs for your future tenants.
For the moment, population growth stands at 3.08%, while employment growth is at 2.61%. The rental yield is 8.55% so you stand to make a good profit on your investment.
The city of Jacksonville, Florida has seen a steady population growth over the past few years. Currently, the rate is at 3.1%, whereas employment growth is at 3.2%. What’s very interesting about Jacksonville is the high-occupancy rate of the housing units. Roughly 89% of the available houses are occupied, which is very good news for the future landlord as people will be fighting for a place to live, driving prices up. For now, the rental yield stands at 6.8%.
If you’re looking to invest in Arlington, Texas, you’re making an excellent choice, as the rental yield for this city stands at an impressive 15.6%. The city is rapidly growing, at least as far as the economy is concerned. Employment growth is at 7.55%, which in turn is driving up population growth, currently at 0.43%. This will change over the next few years, as in the current economic situation people will be willing to relocate to any city as long as they can get a decent job there.
Oklahoma City, Oklahoma
Oklahoma City is another hot market, with an impressive rental yield of 11.1%, which is not bad at all. This is sustained by an equally high population growth, 11.9%. As for the economy, there’s been a steady 3% wage growth over the past 12 months and the trend is only going upwards.