Individual buyers and investors look for the same things…price, location and amenities. But, investors need to look for more…current and projected employment rates, population growth and average rental yield or the percentage value of rental income compared to the property’s market value.
Roofstock, GoBankingRates, The Balance and RealWealth came up with these five locations as 2019’s hotspots. All of them are projected to continue their respective investment draws into 2020 and beyond.
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Orlando, Florida
Thanks to the city’s enormous tourism industry (70M yearly visitors to Disney World, Universal Orlando, and dozens of golf courses) and one of the largest research parks in the country that draws industrial and tech talent. As a result, Orlando’s short and long-term rental opportunities are immense, according to Roofstock’s data scientist Jeff Rohde.
One-year job growth came in at +4.17% in 2019 and seven-year population growth came in at +17%. Median single-family home prices came in at $247,000 in 2019, approximately $30,000 less than US median single-family prices. Median rents came in at $1,595/month with a rental yield of 5.7%, according to GoBankingRates.
Orlando will also benefit from the anticipated “silver tsunami” in the coming and next decades.
Jacksonville, Florida
As a hub of renowned companies such as CSX Corporation, Fidelity National Information Services, Fidelity National Financial, Inc. and the NFL’s Jacksonville Jaguars, job growth came in at +3/16% in 2019. Population growth registered +3.1% in 2019 with RealWealth projecting that growth to be +11.55% by 2027.
The median price of single-family homes came in at $190.108, an increase of +4.1% in 2019, with Zillow projecting a price growth slowdown of -1.5% in 2020. GoBankingRates indicates median rents at $1,349 with rental yields of 6.8%.
Jacksonville also boasts proximity to Miami and Atlanta, good weather, a low cost of living and a business friendly government. And remember to factor in Florida’s friendly tax structure for both Orlando and Jacksonville.
Raleigh NC
Raleigh has been experiencing a population boom of approximately 94,000 new residents. Job growth hit +2.6% and the unemployment rate clocked in at 3.1%, according to the Bureau of Labor Statistics, in 2019. More jobs are on the way to Raleigh as IBM, Cisco Systems and Red Hat are now part of the local landscape.
Median single-family home prices increased +4.4% to $283,278. Median rent is now $1,495/month with an estimated rental yield of 8.93%.
Dallas Metro Area including Fort Worth and Arlington
A strong and stable corporate community in Dallas boosts low unemployment rates, 3.4%, and strong job growth, +4.2%. The median rent price is currently $1,750/month with an average rental yield of 10.1%. Roofstock indicates the rental market will remain steady as rents have increased +5.1%.
GoBankingRates endorses Arlington. The median home price is $240,000 and the median rental price is $1,498/month. “This makes for a strong rental yield plus the ability to pay off your property in a little over 13 years.”
Ohio’s 3 C’s – Columbus, Cincinnati and Cleveland
Ohio’s three C’s represent the Millennial attraction to secondary markets and their respective affordability. In Columbus, the median home price is currently $179,900 and median rental price is $1,184/month with a rental yield of 6.85%. The property payoff time is 13 years, according to GoBankingRates.
Cincinnati’s median home price is currently $161,508 and median rental price is $895/month. The rental yield is estimated at 12.02%
Cleveland’s current median home price is substantially less than Columbus and Cincinnati at $67,207. Zillow projects that Cincinnati and Cleveland will experience home prices to in crease between 7%-8%. Current median rental prices come in at $1,582/month in Cleveland with a rental yield of a whopping 27%. Large-scale entertainment and transit projects are driving that rental growth. RealWealth indicated, “Downtown Cleveland has experienced a renaissance over the past several years with an estimated $19B in development completed as planned since 2010.”
Thanks to InmanNews’ Marion McPherson for source data.
Additional source: https://www.gobankingrates.com/investing/real-estate/best-worst-cities-own-investment-property/
Also read: Residents Moving from Too Expensive California, Home Price Growth Gaining Momentum, Goldman Sachs Has New Model to Track Recessions
