Irvine, Calif. — November 10, 2015 — HomeUnion, an online real-estate investment management firm, enabling value investing in single-family rental (SFR) properties, announced today a new ranking of the top 10 markets in the U.S where investors can now affordably and prudently buy rental properties. The list is headed by Charlotte, N.C., and tends to be made up of middle market cities and MSAs.
In creating the rankings, HomeUnion focused exclusively on non-owner occupied properties and used a combination of median prices of investment properties, year-over-year job growth, gross rental yield, and housing affordability.
Based on HomeUnion’s analysis, the top 10 SFR investment markets are:
- Charlotte-Concord-Gastonia, NC-SC
- Orlando-Kissimmee-Sanford, FL
- Baltimore-Columbia-Towson, MD
- Cincinnati, OH-KY-IN
- Jacksonville, FL
- Birmingham-Hoover, AL
- Tampa-St. Petersburg-Clearwater, FL
- Indianapolis-Carmel-Anderson, IN
- Milwaukee-Waukesha-West Allis, WI
- Nashville-Davidson-Murfreesboro-Franklin, TN
Highlights from the Top 10 Markets:
- Charlotte topped the ranking because of its strong job growth. It had the highest job growth rate of any of the top-10 cities and had the third best job-growth rate of the top 55 MSAs. It was also ranked 21st in investment home price and 27th in gross rental yield.
- Nashville rounded out the top 10 list, ranking 14th in job growth, 23rd in investment home price and 21st in gross yield rank.
- Among the top 10, Nashville had the highest median investment sales price at $125,000.
- Birmingham and Cincinnati had the lowest median investment sales price at $70,000, which were the 4th and 5th markets of the 55 markets examined.
- Milwaukee had the highest gross rental yield on the list at 20.7 percent.
“Places like San Francisco, Miami or Brooklyn are not on our list, because homeowners—who have different motivations than investors—have driven up prices in those markets to the point where cap rate and gross yield calculations simply don’t make sense for investors,” explained Don Ganguly, CEO of HomeUnion. “Likewise, many of the sand state markets, like Las Vegas and Phoenix aren’t on the list because institutional investors have absorbed much of the distressed inventory and raised the barriers of entry for smaller, retail players.”
Ganguly added, “Like any other investment, the focus for SFR investors should be on long-term rate of return and each of the markets on this list has favorable rental yields, low-cost entry points and solid, long-term economic fundamentals. Nationally, macro-economic factors, such as lower homeownership rates, are quite favorable for SFR investing, but real estate is still all about location and finding accessible markets that have low entry points, like Cincinnati and Birmingham, or high gross rental yields, like Milwaukee.”
HomeUnion’s investment site allows individuals to invest remotely in single-family real estate, an asset class that was previously not available to the individual investor. With HomeUnion’s guidance, investors choose a property from HomeUnion’s database of vetted investments that best fits their investment needs (income generation, growth or balanced). HomeUnion manages the acquisition for the owner and then handles the ongoing management of the property. The site has been operational since May 2014. HomeUnion defines investment properties as having an absentee owner for tax purposes, and includes single-family homes and condos.
HomeUnion Research Services analyzed 55 of the largest metro areas across the country to determine the best markets for single-family home investors. Four different metrics were leveraged to determine investment attractiveness; including the median price of an investment home, average gross rental yields, year-over-year job growth, and home affordability. The key fundamentals were chosen to anticipate future demand, cost of entry, profitability and the likelihood that renters transition into ownership.
HomeUnion is an online real estate investment management firm, bringing value investing to the individual investor in single-family rental (SFR) properties. Based in Irvine, Calif., it provides all the services needed for individuals to invest remotely in SFR properties. The company uses a combination of data-driven proprietary analytics to incorporate over 120M homes and 200,000 neighborhoods into their database, and then delivers its solutions to an on-the-ground infrastructure that currently serves 20 locations and expanding. HomeUnion’s role spans the lifecycle of the investment transaction: from identifying sound investments; handling all aspects of acquisition; maximizing income; protecting asset value; and selling it when the time comes.