Wondering Where to Invest? Investment Property Hotspots Based on Rent Appreciation and Gross Yield Revealed
Owning investment properties can be a great way to supplement your income or passively build your personal wealth, but it starts with a good property in a strong rental market. Real estate investors need to know both their strategy and the metrics to consider when identifying strong opportunities. Whether your investment strategy relies on rental appreciation, gross yield or a healthy combination of the two, we’ve analyzed the data to find the top metro areas for each.
We looked at the largest 250 metropolitan statistical areas (MSAs) to identify the top 10 metro areas experiencing the highest rental appreciation. The report pulled average rental rates of three bedroom single-family homes over a three year period. Majority of these metros have experienced an influx in population due to booming job markets.
- Los Angeles-Long Beach-Anaheim, CA
22.2% rental increase since 2014
- Riverside-San Bernardino-Ontario, CA
21.2% rental increase since 2014
- Dallas-Fort Worth-Arlington, TX
19.3% rental increase since 2014
- Phoenix-Mesa-Scottsdale, AZ
19.1% rental increase since 2014
- Miami-Fort Lauderdale-West Palm Beach, FL
18.5% rental increase since 2014
- Atlanta-Sandy Springs-Roswell, GA
18.0% rental increase since 2014
- San Antonio-New Braunfels, TX
16.2% rental increase since 2014
- Las Vegas-Henderson-Paradise, NV
16.0% rental increase since 2014
- Tampa-St. Petersburg-Clearwater, FL
15.7% rental increase since 2014
- Austin-Round Rock, TX
14% rental increase since 2014
To demonstrate gross yields across the country over the past year, we decided to let the heat map do the talking. It's clear that yields in the west coast don't come close to the impressive yields occurring in the Rust Belt - Flint and Detroit, Michigan, most parts of Pennsylvania, and much of Ohio. This area has undergone significant changes over the past years, including investors rehabbing the local housing markets and increases in job creation and population growth. The relative affordability in these regions continues to attract large-scale and small investors alike. For those wondering where to invest, areas demonstrating economic growth and affordable, available inventory remain at the top of the list.