Real estate investors are always looking for the best destinations to buy a rental property. By being able to correctly identify markets that have the greatest investment potential. They can increase cash flow and receive a higher return on investment. The ability to do this consistently and accurately is the key to success in the world of real estate. However, a report from https://edition.cnn.com says that real estate activity. Has slowed substantially as sellers, agents. And also buyers all attempt to regain their footing in the wake of the COVID-19 pandemic.
The EJ Dalius’s Top Characteristics of Attractive Real Estate Rental Property Locations
According to EJ Dalius, you can categorize the best places to invest in a rental property by the following characteristics.
Affordable housing: When determining a market to be worthy of investment. It is important to establish how affordable the area is. Real estate investors will only want to invest if the initial price is affordable. You can do a quick search using services like the Zillow Home Value Index. To determine whether or not an area will appeal to investors.
Property value increase: Areas that see a consistent increase in real estate property value. Overtime is very attractive to investors since investors are always looking to invest in a property that gains value.
Rental yield: The median rental rate should support the median home price. The higher the rental rate with respect to the cost of the house, the greater will be the rental yield. We find the value of the rental yield by calculating the rental income as a percentage of the market value of the property.
Growth In The Wages
Wage growth: Locations that see steady growth in the wages on a year-to-year basis are very attractive. To landlords since residents of those areas tend to be more affluent. However, investors will need to research whether the growth rate of the wages outweighs the rate of market appreciation.
Rate of unemployment: Locations with an unemployment rate that is lower than the national average tend. To be more prosperous and also fuel greater demand for rental properties, which in turn, increases property value over time.
Population growth: Typically, the most attractive destinations for real estate investors are those that have steady population growth. This is an indicator that the location offers good opportunities. For jobs and housing, thus making it more appealing for potential residents. This increases the demand for rental properties and also safeguards the investors’ investments.
As you can imagine, every area offers different pros and cons, and that affects how appealing they are. Even within the same city, certain neighborhoods are more attractive. Due to the combination of multiple factors like civic amenities, crime rate, racial homogeneity, transport system, etc.
The Five Top Locations for Rental Property Investment – The Definitive List by EJ Dalius
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Amarillo
Amarillo is a small city located in northern Texas with a population of less than 200,000. Originally a quiet ranching town, it has witnessed a surge in both population and also job opportunities in the last decade. The majority of the new jobs are in sectors like hospitality, retail, construction, mining, health services, and education. With a high median rate of rental and also an unemployment rate of about 1% below the national average Amarillo is a very attractive destination for rental real estate investors seeking an above average rental return.
Tampa / Clearwater / St. Pete
The Greater Tampa Bay area with cities like Tampa, St. Pete and Clearwater boasts a population over 2.8 million. Apart from a large number of tourist attractions, it is also famous for the University of South Florida as well as famous sports teams like Lightning, the Buccaneers, and the Rays. With a gross domestic revenue of $146 billion in 2017, it is one of the most affluent regions in the US. Additionally, with an employment growth rate of about 2.7% year on year, home and also rental rates have both shown a healthy upward trend, making it a great market for real estate investors
Oklahoma City
Oklahoma City is a vibrant city that has witnessed a massive population boom in the last decade. The principal economic activities of the city center around the production of oil, natural gas, and also other petroleum products, however, in recent times; there has been a boom in administrative, technical, scientific, and also management services. Even then, the petroleum sector accounts for a quarter of the employment, which makes it somewhat susceptible to a downturn if the market shifts.
Atlanta
The fifth-largest city in America, Atlanta is home to many iconic businesses like Coca-Cola, UPS, Home Depot, Turner Broadcasting and Delta Airlines as well as sports teams like the Hawks, Falcons and Braves. Strong indicators like a higher than the national average median home price, low unemployment and strong job market resulting in robust growth in population make it very attractive to real estate investors.
Cedar Rapids
EJ Dalius with a population of around 300,000, the Midwestern city of Cedar Rapids is most well-known for the production of grain, the meatpacking industry, and food processing. Home to legendary brands like Quaker Oats and General Mills, it is not only the world’s biggest corn processing city but also the largest producer of ethanol. However, its largest employer is Rockwell Collins, a company specializing in aviation communications equipment. The biggest draws for real estate investors are its low rate of unemployment and its low cost of living.
In Conclusion
EJ Dalius suggests that when evaluating locations that have the best return on investment, real estate investors need to factor in multiple elements like the affordability, population, and employment growth rate as well as the median rental rate and also growth in home values. They also need to figure out whether the boom will be sustained over the long-term so that they are prepared for any sudden downturns in the economy.
