Investments that perform well can include real estate in the U.S. Because of the annual appreciation, a home of any size is likely to increase the wealth of an investor regardless of the swings in the stock market. The compiled list of the best cities to buy rental homes in 2015 is based on New Year data that is publicly available on the web.
Top States for Real Estate Rentals 2015
11. Washington State
2 Factors That Fuel Rental Growth
Low home prices is just one of the factors that can boost the rental market in many cities. The two main elements that investors can evaluate based on public data includes job growth and population growth. Cities that have decreased population growth can often have a shrinking job market. When people are unable to work, less money is available to support the local economy. This includes supporting the rental market that helps investors earn a return.
Population in many cities is rising based on the strength of the economy in many job sectors. The states of Florida, California and Texas and others have witnessed job growth over the past several years. The prices of homes do not always rise when a strong job market continues to grow. This helps support investors who are seeking investment home deals.
Best 10 Cities to Invest in a Rental House
1. Austin, TX
With a population nearing 2 million people, Austin is a growing real estate market. The job growth is near 4 percent each year and the city has a high rent index.
2. Jacksonville, FL
The largest city based on population in the state of Florida is Jacksonville. With a strong urban rental market and increased middle-class families, growth in ROI remains between 8 and 15 percent for investors. Average home prices are slightly less than $200K and most rental homes are less than $100K.
3. Orlando, FL
Like many Florida cities, Orlando continues to benefit from the tourism industry. Many adults and families arrive for leisure and end up calling the Sunshine State home. Returns of 9 percent are common due to the consistent rise in jobs related to the public sector.
4. Denver, CO
The city of Denver has a low unemployment rate, new routes of taxation to support government spending and about 10 percent returns for investors. The current population is nearing 3 million people and grows at almost 6 percent annually.
5. Dallas, TX
While the rate of unemployment is fixed at 5 percent, investors in the Dallas metro area are continuing to seek returns of 10 percent or higher. A median rent index is one of the reasons for cash flow produced in the Irving, Plano and Dallas area.
6. San Antonio, TX
The annual growth in employment of more than 2 percent is helping to fuel the population growth of almost 6 percent in San Antonio. Investors appreciate the under valued real estate that is currently on the open market.
7. Boise, ID
Less than a million people live in the Boise area although the unemployment rate is fixed at 3.5 percent. Most homes are under market value by around 6 percent. Investors seeking growth can usually achieve a 9 percent ROI in this city.
8. Provo, UT
More than a half-a-million families call Provo home with the average home price above $200,000. A low unemployment rate and underpriced homes make this area attractive to investors.
9. Houston, TX
The metro Houston area includes surrounding cities that each have higher than national average job growth percentages. Homes in this area are currently under priced although population has increased steadily since 2010. Returns of 12 percent are common in this city.
10. Sacramento, CA
Surrounding towns of Roseville, Arden and Arcade make up the general Sacramento area. Homes are nearing $300K on average and 10 percent returns are common in Northern California. Many homes are still under valued compared to the housing boom in 2008.
Florida Rental Homes with Paying Tenants
Any person can buy a rental home and wait for income to be built. A different approach is taken by JWB. Homes for sale already come with a tenant agreement that is in place for several years. This instantly provides ROI that many investors cannot find through simply flipping a home for a quick profit. A free Florida investor's guide is available to download on this page.