DALLAS, June 12, 2012 // PRNewswire // -- There's more than one reason to tune into Dallas this month. The just-released survey of the Best 100 U.S. Markets to Invest in Rental Property shows that Dallas (16th place) and its neighbor Fort Worth (15th place) are two of the hottest markets in the country both for expected returns on rental properties and job growth.
Of the 50 top markets in the quarterly survey sponsored by HomeVestors of America, Inc.,® (known as the We Buy Ugly Houses® company) and Local Market Monitor, Inc., Texas captured seven spots, with Austin (26), McAllen (32), San Antonio (34), El Paso (39) and Houston (43) joining Dallas and Fort Worth. Only Florida had as many cities in the top 50.
The quarterly rankings are based on the expected future relative returns of single-family homes and are based on data gathered in the second quarter of 2012.
Commenting on the survey, HomeVestors' co-president, David Hicks noted that more than 90 of the markets on the list met or exceeded the average national risk return ratio of five percent, making them attractive cities for buying homes as rental investment properties. But he emphasized that investors should factor in both the risk-return premiums and local job growth rates when making their decision on where to invest.
"For instance, all of the Texas cities showed healthy risk-return premiums and strong job growth," Hicks noted, "which lessens the risk of finding renters."
Ingo Winzer, president and founder of Local Market Monitor, pointed out that the rankings actually show Las Vegas, Detroit and Deltona as the "top arbitrage prospects, but note that job growth in those markets is poor, which increases the risk of not finding suitable renters."
And although Florida tied with Texas in the number of top 50 spots in the listing, Winzer advised investors to approach the markets in the Sunshine State with caution. "Overall the Florida markets will be slow to recover because so many homes were sold as 'investments' and now sit empty," he noted.
The top ranking Florida cities were Daytona Beach (3); Orlando (4), Tampa (10), Ft. Lauderdale (12), Fort Myers (14), Jacksonville (17), Venice (19), West Palm Beach (19) and Miami (28).
"We think this is the best opportunity for investors to accumulate rentals in the last 30 years," Hicks said. Winzer agrees. "Rentals will continue to be a good investment even when home prices start to rise again, but investors who can take advantage of the current opportunity will have sizable returns," he said.
For short term opportunities in addition to the Texas cities, Hicks pointed to Warren (5), Bakersfield (6) and Phoenix (7), which have some of the highest risk return ratios and show healthy job growth. "There are opportunities everywhere, but investors need to factor the risk return ratios and job growth prospects into their purchase price calculation to ensure an adequate return."
Winzer added, "With home prices lower and rents higher, the opportunities for investment in rental properties have never been better, but they must be grasped in the next few years because home prices will eventually catch up."
HomeVestors and Local Market Monitor estimate that approximately 14 percent of single-family homes in the U.S. are maintained as rental properties. The companies believe there is no other regularly produced, reliable national ranking of the expected future performance of homes maintained as rental properties, which makes this ranking particularly useful to prospective investors.
Local Market Monitor, the premier real estate forecasting solution, offers investors in homes and home mortgages the local market risk intelligence they need to make informed decisions. Using a proprietary formula called the Equilibrium Home Price, Local Market Monitor determines if markets are currently over or under valued, equipping users with a long-term risk and investment perspective. Covering over 300 local markets, Local Market Monitor also presents key investors with a 12, 24 and 36-month home price forecast. The solution includes sorting capabilities allowing subscribers to view and compare real estate markets along various metrics, including an Investment Suitability Ratings to identify opportunities based on individual investing goals. To learn more, visit www.localmarketmonitor.com or call 800-881-8653.
Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties. Most commonly known as the "We Buy Ugly Houses®" company, HomeVestors strives to make a positive impact in each community. In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review's "Top 50 Franchises," a distinction awarded to franchisors with the highest level of franchisee satisfaction. For more information, visit www.HomeVestors.com.
SOURCE HomeVestors of America, Inc.