Being a landlord on your own can be a stressful and time-consuming task. In addition to handling all of the property management responsibilities, identifying the right rental property for your investment goals makes the process even more challenging. Selecting properties in locations with high annual rents requires deep insight into each local market. As a result, a landlord could spend a lot of money, time and other resources selecting rental properties in areas with high rents.
For a novice landlord or investor, researching market fundamentals can be a full-time job. That’s why we recommend using a third party, like the leader in the residential real estate investing sector – HomeUnion. Our Data Science team has big data on more than 110 million homes and 200,000 neighborhoods across the country. That simply means that we are able to provide you with detailed insight on every neighborhood and property on our platform, making you a more competitive participant in the investment housing market.
This big data provides performance on each of our metros. We analyze real estate markets based on a variety of indicators: annual rents, occupancy rates, job growth and more. Collectively, these metrics empower your investment decisions, and buying a rental property is one of the biggest investment decisions you’ll ever make in your life.
We often create studies to help investors feel more confident when making these major investment decisions. To that end, HomeUnion Research Services conducted a study to find metro areas with the highest annual rents on HomeUnion.com since the amount of rent an investor collects annually is one of the most important determinants of a property’s success.
3 Markets with the Highest Annual Rents
With its booming tech sector and high employment rates, Austin is the most expensive rental market on our platform, ideal for landlords seeking long-term appreciation. According to the Bureau of Labor Statistics (BLS), Austin’s unemployment rate dropped 70 basis points from June to November 2017, hitting 2.7 percent, well below the national average of 4.1 percent.
“This low unemployment rate indicates that companies are hiring throughout the region, which will support rising rental demand and likely spur landlords to raise rents in 2018,” says Steve Hovland, Director of Research for HomeUnion.
The average Austin renter spends nearly one-third of their annual income – 32 percent – on rent each year. The average renter spends $20,136 on rent in the Austin region.
Tampa ranks second in our list of markets with the highest annual rents. Landlords collect an average of $18,024 per year in rent, which amounts to about 32 percent of a local renter’s annual income. And with the currently low investment home prices on our website, you’re sure to profit from the Tampa single-family rental market.
“Much like Austin, Tampa’s employment picture continues to improve, fueling demand for all types of rentals,” notes Hovland. From June through November 2017, the unemployment rate dropped 40 basis points to 3.6 percent, also outperforming the nation, according to the BLS.
Raleigh claimed the third-highest spot in our rankings of markets with the highest annual rents. The metro features average annual SFR rents of $18,840, which equates to just over 29 percent of a resident’s annual income. Raleigh rental home prices on our site are currently low, relative to the national median investment home price of nearly $200,000, according to Hovland.
Chicago Rents Lowest on HomeUnion.com
For landlords and remote investors seeking more immediate yields and lower annual rents, Chicago is a great place to invest. Chicagoland is the only region in the country where typical renters spend less than 20 percent of their income on housing, $19,956 annually.
In fact, Chicago is an optimal location for first-time investors. Emerging neighborhoods like Logan Square and other West Side locations have become increasingly popular areas for young professionals, expanding the renter pool. “If demand continues among this millennial segment over the next few years, landlords can rely on stable, cash-flowing properties,” explains Hovland.
If you’re a landlord who prefers to rely on the residential real estate investment leader for your investment and management needs, why not use HomeUnion? That way, you can sit back and collect high annual rents or opt for properties with low acquisition prices, or a mix of both. Contact one of our Solutions Managers to help you build your portfolio today at firstname.lastname@example.org.