Best rental return markets for American landlords

May 10, 2017 (STLRealEstate.News) The competition is stiffer than ever today as the supply of American homes remains at historic lows.  With the low supply and mounting demand, one would think that real estate investment would be decreasing.  However, regardless of the supply, investors are still pouring in and wondering where they should make their real estate investment.

Today, interest rates remain remarkably low, which makes financing an investment home easier.  Low rates also have investors looking for higher yield, and single-family rental homes present an attractive option to many.  These homes offer a steady, monthly stream of income while also offering an increasing value as initial investment increases across the board.

Steve Hovland, Director of HomeUnion, a real estate marketplace that gathers data and information, stated, “We are seeing more investors and new investors.  The Fed has been really helping us out. Interest rates are not as high as they have been in past cycles.  Commercial real estate is overheated.  The bull stock market has been running for a long time, so investors are looking to diversify.”

Like everything in the real estate industry, returns are based on the local community and other important variables in the equation.  Markets that command the highest rents do not always offer the highest rental returns.

HomeUnion gratuitously released their top 10 cities for the best rental return in investment in America today.  The list starts with Cleveland, Cincinnati, Columbia, S.C., and Memphis.  Following them come Richmond, Oklahoma City, Indianapolis, St. Louis, and Pittsburgh.  For those curious about the worst investment markets, steer clear of San Francisco, San Jose, Orange County, San Diego, Los Angeles, Seattle, Sacramento, Salt Lake City, and Oakland, California.  The findings confirm that the Midwest is where the investment potential resides today.  Instead of looking at California’s shiny cities, consider the up-and-coming potential of Midwestern America.


Picture courtesy of City Hall – Cleveland