DALLAS, Sept. 24, 2012 // PRNewswire // -- Destination Heartland! That's where savvy investors should be heading according to the latest rankings of the best real estate markets for investing in single family homes as rental properties. Investment opportunities still boom in America's major metro areas such as Dallas, Atlanta, Phoenix and Minneapolis, but don't overlook places like Lafayette, LA or Erie, PA.
The quarterly rankings data points to Small Town, U.S.A. -- cities with populations between 200,000 and 500,000 -- as good places to invest as well. "Many of these markets not only have unemployment rates well below the national average, but they show strong job growth and housing prices have bottomed out," said Ingo Winzer, president and founder of Local Market Monitor (LMM). LMM and HomeVestors of America, Inc., (known as the "We Buy Ugly Houses" company) analyze and report the quarterly data.
Winzer says that the smaller markets are "great places to rent out single-family homes because strong economic growth can quickly absorb the existing housing options."
The top ten smaller markets in order are Lafayette, LA; Fort Wayne, IN; Erie, PA; Corpus Christi, TX; Houma, LA; Fayetteville, AR; Tyler, TX; Longview, TX; Lincoln, NE; and Ann Arbor, MI.
All of these markets have low "risk premiums." The lower risk premiums of the smaller markets make them a safer investment.
"Investors should approach our top 20 large markets with caution," advises Winzer. "Even though the higher risk premiums mean investors may be able to get a higher return relative to their investment, 18 of these markets are in California, Florida, Nevada or Michigan, all areas that have suffered from an overabundance of housing, a poor local economy, or both," Winzer notes.
"Many of the California markets were over-developed during the housing boom because home prices were still affordable compared to the big coastal markets; lower prices on the coast now diminish that attraction. The Florida and Nevada markets were heavily developed for second-home buyers, now evaporated, leaving them with too much supply for local demand to absorb. In Detroit, the population is just outright shrinking," he says.
His advice: Don't hesitate to look at smaller markets for investment. That's the same advice that HomeVestors' co-president, David Hicks, is offering. "We often see that the smaller markets are the best-kept secret of investing, for example in Fort Wayne, IN or Lincoln, NE or Ann Arbor, MI. Many of these smaller markets offer a consistent demand for rental properties. Investors can discover for themselves that the big city isn't the only place with a great deal for investors," he said.
"Interest in investing in single family houses has never been higher coast to coast. HomeVestors has already added a record number of new franchises this year, with a quarter of the year to go. And the new franchises are from 25 different states and 54 different markets across the country," Hicks noted. "Although the number of independently owned and operated HomeVestors® franchisees has always been strong in many of the metro areas, we also have many franchises in these small markets and that number is increasing, from Evansville, IN to College Station, TX, to Eureka, CA and to Mobile, AL. "
The Best Markets ranking is one of the most comprehensive regularly researched, reliable national index of the expected future performance of homes maintained as rental properties. It ranks U.S. markets based on the expected future relative returns of single family homes that are purchased as rental property. The rankings also serve as a guide for investors in determining how much to pay for a rental property and for homeowners hoping to attractively price their homes for sale.
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.