Rental property is the new favorite among those who want to invest in real estate. The markets which offer better chances for investment are the ones which can provide you the higher finance. They must offer you a good return and accelerate cash flow. However, all the real estate markets are different from each other.
The Criteria to Find the Best place to invest in property
Here is a list of fundamental attributes. The potential best place to invest in property must have them.
• Wage Growth and rate of unemployment:
Wage Growth: An area with economic growth is the ideal choice for a landlord to invest. Annual growth in the daily wages or salaries for certain jobs within an area is its wage growth. The level of growth in market appreciation and rental property must be equal to wage growth.
Unemployment rate: This is also an important factor to impact investment in real estate in the area. 3.3% is the national unemployment rate according to the latest statistics. A top real estate market must have lower unemployment rates than the national figures.
• Affordable housing facilities:
The most important criterion to determine a top market is a reasonable price. Reasonable housing facility has a correlation with the investment potential. This correlation does not have anything to do with investment size. The median Zestimate housing price for a certain area determines the housing cost in a certain area.
• Population growth:
Increasing the population of a place is always a positive indicator in the real estate market. A top real estate market will grow in terms of population which will further indicate that the area has growth opportunities. It also implies that people prefer to reside in that particular area because it has a better job, health, and educational facilities. The growing population also means better infrastructure which makes that area the best place to invest in property.
• Increase in Rental yield and property value
The areas which tend to have a higher value in the future are the best place to invest in property. There is a strong correlation between home value change and percent change in a city’s average home value for years.
The median rental rate must support the norm home price in a specific area. The rental yield will go higher if the rental rate grows along with the housing cost. The percentage value of the rental amount in correlation with the market value of the property determines rental yield.
The macro and micro levels of the real estate market operate differently. A country or city represents the macro level, may offer the investors high opportunities in rental investment. Some of the areas in that city or country which represent the micro-level may offer better rental investment opportunities than the other areas in the same macro level. You need to identify the micro areas which can give you better rental yield and prove to be the best place for investment in property.
Other factors along with High Returns
A market for real estate can provide better financial returns even if the wage growth is slow or the population of that area is decreasing. Even the high unemployment rates do not affect that market return. Although such markets are rewarding in terms of rental yield, they are not as strong as the top ten best places for investment in property.
Following is the list of top ten real estate markets.
• St. Louis, Missouri
• Pittsburgh, Pennsylvania
• Detroit, Michigan
• Salisbury, Maryland
• Lima, Ohio
• Montgomery, Alabama
• Birmingham, Alabama
• Cleveland, Ohio
• St. Louis, Missouri
These markets are part of the top ten list on the basis of facts and figures. All of these markets have wage growth of a minimum of 3 percent with the unemployment rate lower than the median national unemployment rate. Moreover, these real estate markets offer 9 percent or more rental yield per year. These areas are the favorite for the people to move in over the years and thus, have a minimum of 3 percent population growth.
Any “best market may not be the best market for you. Everyone has their specific risk tolerance, financial targets, and investment strategies. So have a detailed check on a market before investing to see if it suits you.Last updated on: