Stock market returns for 2015 were relatively flat; to make up for this, many investors diversified into single family rentals (SFRs) to improve the returns of their portfolios. While investors purchased SFRs in markets throughout the country, the following are the top three markets that drew the eye and investments of HomeUnion clients in Q4 of 2015:
Several factors such as steadily rising rents and a stable and growing economy drew investors to SFR investments in the Chicago area in Q4 and will continue to draw these investors to the Windy City into 2016. Other factors include:
- Low vacancy rates that ended the year at 4.5%; a full 20 basis points lower than the previous year
- Construction of the Marriott Marquis Hotel, which will create thousands of construction jobs, as well as 2,500 full-time positions once the work is complete
- ConAgra relocating its headquarters to Chicago in the Summer of 2016, which will bring 700 jobs to the region
Here is a great example of a Chicago income property that was purchased by one of our customers. We took care of the entire acquisition process, oversaw the rehab to get it rent-ready, and continue to perform the day-to-day management of the property to provide a hands-free investment experience for our customer.
Rent: $1,250 per month
Yield: 14.18 %
Many HomeUnion investors wisely chose to invest in Indianapolis, where the median price of a home is still below peak levels, and leaves plenty of room for investments to appreciate. Demand for rental properties has also increased thanks to the expansion of several major companies in the area:
- Amazon added 1,800 positions to their three new distribution centers in the region in 2015
- Grocer Kroger will add more than 3,400 employees to the area through 2017, with an 11 store expansion and the renovation of 22 existing stores
Monthly rents have been on a steady climb, while vacancy rates have been trending downward over the past two years. These factors mean this metro offers potential returns that make it a worthwhile alternative the volatile 2016 stock market.
This Indianapolis cash flow property was purchased by one of our customers who was seeking a tax-deferred asset they could own within their self directed IRA.
Rent: $995 per month
Raleigh-Durham, North Carolina
Raleigh-Durham headed up our list for the best real estate investment cities in America, partially because it is one of the fastest growing economies in the nation.
Tech employment growth and university housing demand were two factors that worked in tandem to keep regional vacancies at the close of 2015 at a low 4.8%.
As you can see in the chart below, the rents here are on a steady upward trend and don’t show any signs of slowing down in the future.
This Raleigh-Durham income property was found for one of our customers seeking a non-traditional asset for their portfolio. In order to maximize the amount of rent this property could generate, we oversaw the rehab process, to ensure it would attract the right tenant.
Rent: $950 per month
Although these three markets were most popular with our investors during the last quarter, they represent only a fraction of the 26+ markets in which HomeUnion is currently active. HomeUnion takes a data-driven, end-to-end approach to real estate investing, so our clients have access to the best properties, streamlined customer service, and the most up-to-date research at their fingertips.
Learn more about how you can easily add real estate to your portfolio by signing up for a consultation with one of our skilled solutions managers.