The real estate market in the US has been through tough times and just early in the year it had been through another stumble. This is in fact a huge concern especially if you are looking into buying a home and becoming a landlord. But now, a piece of good news has surfaced as previously owned homes were snapped by Americans in May in the biggest monthly sales gain in almost three years. This is a good sign and one which means that the residential real estate market is on the right track.
The rental market specifically has been experiencing a rapid growth over the past several years, with many landlords earning double-digit returns of 10% or more. Although in some markets, the increasing prices of homes have diminished profits for landlords, there are still some markets that offer plenty of returns. That is based on the report by RealtyTrac which has analyzed rental market conditions in 370 major U.S. counties, including average rents, median home prices and unemployment rates.
A good place to start would be in Anderson County, S.C., where landlords who rent out a median priced three-bedroom home would average returns of 15.3%. This figure is even higher than the national average of 10% as found by RealtyTrac. This is due to the cheap homes that are found in the area at a median price of less than $70,000 while monthly rents average at $900. Anderson is a part of the Greenville-Anderson-Mauldin, SC Metropolitan Statistical Area.
The area is a growing industrial, commercial and tourist center. As the home of Anderson University of approximately 3,000 undergraduate and graduate students and several auto parts makers for BMW, it has a low 4.3% unemployment rate. This only means that the demand will continue to rise and help add to future profits. Other areas that will make being a landlord great is in Woodbury County, Iowa. Median home prices in the area were as low as $84,250 while monthly rents averaged at $914, including the ones in the Sioux City metro area. That is a big 13% rental return for the landlords.
Low unemployment is one key factor that future landlords should take into account when assessing a market. However, that is not the only thing that matters. According to RealtyTrac, investors should also look at the demographics of an area thoroughly especially when it comes to baby boomers and millennials. The number of individuals who are experiencing major life changes in these demographics will grow rapidly and that should help investors in deciding when and where to buy and sell.
For boomers born between 1945 and 1964, retirement-friendly markets in Florida are predicted to be hot. Since 2007, a 20% growth or more has been observed by some local markets. Just make sure that before you buy anything there, you get to read the Florida landlord/tenant law. For Millennial markets, the leading metro areas include the ones in Baltimore, Philadelphia, Jacksonville, Fla. and Atlanta. It also includes several smaller markets such as Fayetteville, N.C. and Virginia Beach/Newport News City, Va.