By US Daily Review Staff.
A review of real estate investment opportunities shows that some of the best opportunities may be headed South. The fourth-quarter analysis of “Best Markets to Invest in Rental Property” places five Florida markets in the Top 10 of U.S. markets. Daytona Beach and Fort Myers moved up from 109 and 125 and into the second and fifth spots respectively, joining other Florida cities of Orlando, which came in at number four, Ft. Lauderdale at number eight and Tampa at number nine.
The five other cities that fill-out the top ten rankings are first place winner, Las Vegas, Detroit (No. 3), Warren, Mich. (No. 4),Bakersfield, Calif., (No. 7) and Rochester, N.Y. (No. 10). It should not be surprised that “best ranking” in this category means “worst ranking” in other economic indicators. Rental properties are exploding these areas as huge numbers lose their homes in foreclosures.
The “Best Markets” ranking, which is updated quarterly, is the only regularly researched, reliable national ranking of the expected future performance of homes maintained as rental properties, according to Homevestors.com
The quarterly list is compiled by Local Market Monitor and reviewed by HomeVestors of America, Inc., (known as the “We Buy Ugly Houses” company). It ranks 100 U.S. markets based on the expected future relative returns of single family homes that are purchased as rental property. The rankings also serve as a guide for investors in determining how much to pay for rental property.
“We think Florida is one of most interesting states in terms of rental property opportunities,” said Ingo Winzer, president and founder of Local Market Monitor, Inc. “That’s because home prices haven’t bottomed out, and rents will eventually be supported by renewed population growth.”
The best Florida opportunities in the short term, he noted, are Daytona Beach and Tampa since both cities have job growth rates above two percent, while Orlando and Ft, Lauderdale have job growth rates less than one percent.
“Where the local economy is still struggling, investors must take a long-term view for any real estate investment. Our top-ranked cities have the potential to generate higher returns, but that will depend, in part, on how quickly the local economies recover. Las Vegas and Detroit could still take some time to realize their potential; markets like Bakersfield, Boise, Phoenixand Dallas, which are all in the fourth quarter’s Top 20, have higher job growth rates and may be better opportunities in the short-term,” he added.
David Hicks, co-president of HomeVestors, noted that the list can be used by investors looking to expand or start their single family rental portfolio.
“We think this is the best opportunity for investors to accumulate rentals in the last 30 years,” he explained. “We’re seeing a surge in activity from our franchisees, especially since financing rental properties with lenders such as CFAM ResCap increase their ability to buy, rehab and hold cash flowing rental properties.”
CFAM ResCap is, according to the company, “a leading provider of residential mortgage loans. More than two years ago, HomeVestors entered into a relationship with CFAM to assist franchisees with financing for acquiring, rehabbing and holding single family rentals.”
“We advise our franchisees and their investors to take advantage of the changes in markets like Florida which only a few years ago did not offer the opportunity to acquire cash flowing rentals,” Hicks explained.
HomeVestors and Local Market Monitor estimate that approximately 14 percent of single-family homes in the U.S. are maintained as rental properties.