Counties inTexas, Oklahoma, New York, Tennessee and Florida top list of overlookedmarkets
Companies also releaseTop 25 Investor-Saturated Single Family Rental Markets, alist dominated by Atlanta-area counties
IRVINE,Calif., and WESTMINSTER, Colo. – Sept.19, 2013 — RealtyTrac®(www.realtytrac.com), thenation’s leading source for comprehensive housing data, and RentRange (www.RentRange.com), thenation’s leading provider of residential Rental Market Intelligence™ to thefinancial services and real estate industries, today released a list of the Top25 Hidden Gem Single Family Rental Markets nationwide based on gross rentalyield, the expected return on investment before accounting for taxes,maintenance fees and other costs.
The Top 25 Hidden GemSingle Family Markets were determined by evaluating gross rental yield dataprovided by RentRange, institutional investor sales data provided byRealtyTrac, and unemployment data for more than 450 nationwide counties withpopulations of 100,000 or more. The analysis was limited to single family homeswith three bedrooms. The top 25 markets had the highest gross rental yields incounties where institutional investor purchases accounted for 5 percent or lessof all residential sales in the three-month period ending in July, and theunemployment rate was 7.5 percent or lower.
Gross rental yield is a commonlyused method of comparing properties. It is determined by dividing the grossannual rental income by the purchase price or market value of the property, andoffers an apples-to-apples way to compare rental properties andgeographies.
“Buying single family homes as rentals still yields solid returns inmany markets across the nation, but it is difficult for individual investorsand even small-to medium-sized institutional investors to find reasonablypriced inventory in markets dominated by the 800-pound gorillas in the singlefamily rental space,” said Daren Blomquist, vice president at RealtyTrac. “Withthis analysis we’ve identified the top overlooked markets where single familyrentals still make good financial sense but where there is little to nocompetition from the big players.”
“Real estate investmentopportunities vary greatly market by market,” said Wally Charnoff, CEO ofRentRange. “The availability of gross rental yield information and othervaluable analytics empower buyers to make more scientific decisions about whereto invest.”
Thehidden gem counties may represent opportunities for smaller investors orowner-occupiers, with less competition from institutional investors. Investor activity claimed more than 5 percent of the market in over 20 percentof all counties for the three months ending in July. “Heavy buyingfrom large institutional investors in some markets contributes to priceappreciation and scarcity of listings, leaving small investors andowner-occupiers feeling left out in the cold. These levels ofinstitutional investor buying will ultimately drive prices up and rental yieldsdown,” said Jake Adger, Chief Economist ofRealtyTrac.
Localbroker quotes from the RealtyTrac Network
“Asinventory continues to decline in the mid-Tennessee market, renting a home isbecoming more of an option compared to the last few years, and our marketreflects that with strong returns on rental investment,” said Bob Parks, CEO ofBobParks Realty. “Also, as a lesser-known market nationally,Nashville tends to be somewhat under the radar as an investmentopportunity. We have enjoyed a strong rental market, and tend to seeowners with less than 10 properties do very well with returns making this agreat time for investors big or small to look at MiddleTennessee.”
“While we areseeing depletion in our investment inventory, we are not necessarily seeing anincrease in large investor activity. This is likely because ourregion has not been recognized as a ‘distressed market.’ In fact, SouthwesternPennsylvania has enjoyed an increase in sales of 12.5 percent and propertyvalues have had a steady appreciation of roughly 2 to 4 percent annually.” saidRon Croushore, CEO PrudentialPreferred Realty.
“Due to the influx of companieswithin the energy sector, investment properties have experienced strong rentalreturns,” continued Croushore. “Additionally, the boom of Marcellus Shale overthe past few years has brought employees looking for long-term rentals into ourarea; which, in turn, has driven the rental rate up and tightened the overallmarket. We predict this trend will progress into the years ahead as the energyindustry continues to grow and employ theregion.”
MedianMarket Value: Represents the middle market price of three bedroomsingle family properties within the MSA for the month of August 2013.
Median Rent Value: Represents themiddle rent price of three bedroom single family properties within the MSA forthe month of August 2013.
Gross Rental Yield:A percentage based measurement of profit or loss from an investmentthat is calculated by dividing the annual gross rental income by the purchaseprice or market value of the property.
InstitutionalSales Percent: Percent of all residential sales where aninstitutional investor was the buyer during the May to July 2013 timeperiod.
Institutional Investor: Anyentity that has purchased at least 10 single family properties in a 12-monthperiod.
The RealtyTrac U.S.Foreclosure Market Report is the result of a proprietary evaluation ofinformation compiled by RealtyTrac; the report and any of the information inwhole or in part can only be quoted, copied, published, re-published,distributed and/or re-distributed or used in any manner if the user specificallyreferences RealtyTrac as the source for said report and/or any of theinformation set forth within thereport.
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Investors, businessesand government institutions can contact RealtyTrac to license bulk foreclosureand neighborhood data or purchase customized reports. For more informationcontact our Data Licensing Department at 800.462.5193 or firstname.lastname@example.org.
RealtyTrac (www.realtytrac.com) is thenation’s leading source for comprehensive housing data, with more than 1.5million active default, foreclosureauction and bank-ownedproperties, and more than 1 million active for-sale listings on its website,which also provides essential housing information for more than 100 millionhomes nationwide. This information includes property characteristics, taxassessor records, bankruptcy status and sales history, along with 20 categoriesof key housing-related facts provided by RealtyTrac’s wholly-owned subsidiary,Homefacts®.RealtyTrac’s foreclosurereports and other housing data are relied on by the Federal Reserve,U.S. Treasury Department, HUD, numerous state housing and banking departments,investment funds as well as millions of real estate professionals andconsumers, to help evaluate housing trends and make informed decisions aboutreal estate.
RentRangeis the nation’s leading provider of Rental Market Intelligence™ to thefinancial services and real estate industries. It delivers a wide assortment ofaddress and geography level rental data, analytics, and rent based valuationsolutions for single and multi-family properties, with products that include acombination of on-demand automated rent valuation reports and subscriptionbased macro data available at the MSA, county, city and zip code levels.RentRange clients include institutional investors (REITs, hedge funds, privateequity groups); property managers and landlords; mortgage lenders and financialinstitutions; default servicers and asset managers; Wall Street firms andrating agencies; government sponsored enterprises (GSEs); technology companies;and valuation-based fulfillment service organizations. RentRange was founded in2007 and is located in the greater Denver area. For more information pleasevisit RentRange.com.
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