On Thursday, RealtyTrac released its Residential Property Rental Report for the March 2015 quarter, once again ranking the best American markets for purchasing residential rental properties in the country.
The detailed report also delves into the markets that are expected to enjoy the biggest rental rate increases in 2015 as opposed to the previous year, as well as rankings of the top safe haven markets in the residential rental space. Per demographic, RealtyTrac also included the best markets for certain segments, including Millennials, Generation Xers, and Baby Boomers. Generally speaking, it is the younger Millennials seeking to enter the market, the Gen Xers recovering from their recession-era setbacks, and the Baby Boomers preparing to enter their golden years of retirement.
“With homeownership rates at their lowest level in 20 years, historically low levels of housing starts and relatively low home prices in many parts of the country, there is still plenty of opportunity in the U.S. housing market for single family rental investors employing a variety of investing strategies,” said RealtyTrac vice president Daren Blomquist in a statement.
“Whether focusing on markets where homeownership-shy Millennials are migrating, markets where recovering Gen X homeowners-turned-renters are prevalent, or markets Baby Boomers are testing for retirement, investors can find good options with solid potential rental returns”
Blomquist also observed that there are markets where single family rentals is no longer a sensible idea, due to the rapid price hikes that have been a headwind to the broader housing market’s growth, for the most part. “Savvy single family rental investors will tread cautiously in such markets despite the siren song of strong home price appreciation,” he added.
The best markets for purchasing residential rentals were mainly located in Georgia, Maryland, Virginia, and Michigan, with Clayton County, Ga. (25.83 percent), Bibb County, Ga. (22.33 percent), Baltimore, Md. (20.99 percent), Richmond, Va. (20.42 percent), and Wayne County, Mich. (19.34 percent).
Since there has been a lot of talk about Millennials reentering the housing market, the RealtyTrac list for Millennial “magnet markets” was led off by Baltimore (20.99 percent), Richmond (20.42 percent), Philadelphia County (18.78 percent), Wyandotte County, Kan. (17.60 percent), and Richmond County, Ga. (16.97 percent).
Seattle was also among the top markets for Millennial consumers, and while it did not place within the top five, it did place in RealtyTrac’s top 50 list. “Not only do many of these Millennials have stable employment, but strong job prospects going forward, and a rosy forecast for future salary growth. All of this has turned Seattle into a sweet spot for those looking to buy rental properties,” said Windermere Real Estate president OB Jacobi. “Vacancies are low, rents are on the rise, and growth in Seattle’s tech sector is providing a built-in clientele for investors with no signs of slowing.”
Among other takeaways from the RealtyTrac report, counties in the Atlanta, Chicago, Jacksonville, Little Rock, and Orlando metros were among those listed as best for Generation X consumers. For the boomer generation, it was no surprise that retirement mecca Florida had several metros and counties on RealtyTrac’s analytics – these included Tampa and Ocala, but the list of top Baby Boomer rental markets also included East Stroudsburg, Penn., and Homosassa Springs and Binghamton in New York.