Family Rental Markets have Highest Returns
There's some good news for investors in single-family homes—particularly if you choose to rehab and rent, rather than sell, them.
A recent report by CoreLogic, a Santa Ana, Calif.-based provider of consumer, financial and property information, provides some insight into the single-family rental market and even indicates which markets across the United States have the highest rental cap rates.
With the recent emphasis on REO-to-rent programs, this is valuable information for single-family home investors.
According to CoreLogic's April MarketPulse report, the West Palm Beach, Fla. market had the most attractive rental cap rate in April among the 26 markets studied by CoreLogic. As any investor knows, a cap rate, or capitalization rate, is a metric that is commonly used to determine the profitability of a particular investment property. The cap rate in West Palm Beach in April was 12.4 percent, indicating that this market provides one of the highest returns to single-family home investors who opt to rent.
Other markets ranked highly in the April MarketPulse report in April were Cleveland (12.3 percent), Fort Lauderdale (12 percent), Chicago (11.6 percent) and Las Vegas (11.4 percent).
Markets with the lowest rental cap rates, on the other hand, included Honolulu (5.4 percent), Raleigh (7.3 percent) and Austin (7.7 percent).
For a complete copy of the April CoreLogic MarketPulse report, visit http://www.corelogic.com/downloadable-docs/MarketPulse_2012-April.pdf