With Albuquerque’s low housing prices and rising rental costs, the metro area is a great market for investors to buy rental homes.
Single-family rental investors typically buy up homes in cities where rental rates grow faster than median home prices. It’s a stable investment as more people don’t want to buy a home, either because they don’t have enough equity to put down on a new house or because renting equates to flexibility for them. According to the U.S. Census Bureau, renter-occupied single-family homes in the U.S. increased 14 percent in recent years, to more than 11 million people renting.
Bernalillo County ranked the 256th best market out of 448 counties for single-family rentals. The report said the county’s average rent for a three-bedroom home is $1,352 per month, an 11.7 percent increase when compared to last year. The annual gross rental yield is 8.6 percent.
The real estate data company also looked at single-family rentals at the zip code level. It determined the highest rental returns in New Mexico were found in zip code 87121, Albuquerque’s far Westside and Southwest Mesa, where the annual gross rental yield is 12.8 percent. The worst in the state is in Santa Fe’s 87506, with a yield of just 2.4 percent.
RealtyTrac said the best places for single-family rental investors are Baltimore City, Maryland; pockets of the Atlanta and Detroit metro areas; and Bay County, Michigan. The worst places for investors because they had the lowest rental returns were Arlington County, Virginia, the San Francisco Bay area, the Nashville metro area and Brooklyn, New York.
To come up with its list, RealtyTrac looked at counties with sufficient home price and rental rate data, which it got from the U.S. Department of Housing and Urban Development and the median sales price of homes in each county.
By: Suzanne Guzman (Albuquerque Business First)
Click here to view source article.