Top 25 Hipster Zips for Returns on Rental Properties

While the precise definition of hipsters is elusive — which  is likely just how they want it — there’s no doubt the culture surrounding the  hipster lifestyle has a major impact on local real estate markets, and mostly  in a positive way.

Thanks to an influx of trendy restaurants, bars, coffee  shops and other amenities, a neighborhood branded as hipster is likely to see  property values and rental rates rise while vacancies and foreclosures decline.  As a nascent hipster market emerges, it can be an extremely appealing target  for real estate investors looking to make some quick fix-and-flip profits or to  purchase rental properties that provide a steady cash flow and the promise of  strong appreciation going forward.

RealtyTrac recently analyzed zip code-level data to identify  established and emergent hyper-local hipster markets where investors can  realize solid returns on rental properties while also enjoying low vacancy  rates that ensure they won’t have much down time between renters. (We’ll look  at top hipster zips for fix-and-flip profits in a later analysis).

 

To select the top markets we started with zip codes with a  disproportionately large population in the prime hipster age range — between 25  and 34. Nationally that segment accounts for 13 percent of the total  population. We focused on zip codes with more than 20 percent of the population  in that age range.

Additionally we narrowed the list to zip codes where at  least 20 percent of the population either walked to work or used public  transportation to get to work given that easily walkable, densely populated  neighborhoods are another hallmark of hipster culture.

On the real estate side we narrowed the focus to zip codes  where renters accounted for occupancy in at least 50 percent of all housing  units, and where the vacancy rate on rental properties was 5 percent or less.  All of these filters left us with only 83 zip codes nationwide, and we sorted  those 83 zip codes by gross yields based on fair market rents and median home  prices to come up with the top 25 list, all of which had gross yields above 4.5  percent.

Below are some examples of homes in the top zip codes.


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