Rent estate has gained a lot of traction over the years because it makes a great investment with high-profit potential. Many consumers are simply more interested in renting than buying these days.
“Even setting aside big upfront expenses like a down payment, rising month-by-month costs are likely keeping many people from purchasing,” says Danielle Hale, an economist for the National Association of Realtors. “Today only 41 percent of people live in a county where the median-income family can afford to buy a home at the median list price, and affordability declined significantly over the past year.”
This has increased the demand for rental properties significantly, but not all markets are designed for rentrepreneurs, or those investing in rental properties. There are many cities better suited for the prospect than others, and one Arizona city made the list.
Avondale makes iPropertyManagement’s Top 100 cities for rentrepreneurs
Most of the top cities on iPropertyManagement’s list were located in the Midwest, Deep South, and in California, but Arizona was not forgotten. Number 84 on the list was Avondale, Arizona, which is projected to have a return on investment of 14.86 percent for rental property investments, a percentage significantly higher than the rest of the nation.
iProperty Management is an organization designed to help real estate investors get the information and resources they need to succeed. To help their clientele, they published a study on the top 100 cities they recommend for purchasing rental properties.
“Buying a vacation rental can be a great investment in today’s market,” the report stated. “…Because of this, many people are taking advantage and investing in real estate. The growing industry has incentivized property owners to enter the vacation rental industry, making it more difficult to keep units occupied. Choosing the right location will give you an advantage on untapped markets that generate a higher return on investment.”
The top 100 properties on the list were chosen based on high return on investment, ease of filling the rental unit, and great property prices. The top 10 properties on the list were as follows:
1. South Bend, Indiana, 86.25 percent ROI
2. Detroit, Michigan, 72.45 percent ROI
3. Green Bay, Wisconsin, 67.96 percent ROI
4. Birmingham, Alabama, 43.33 percent ROI
5. Cleveland, Ohio, 42.73 percent ROI
6. Biloxi, Mississippi, 38.92 percent ROI
7. Kalamazoo, Michigan, 37.6 percent ROI
8. Dayton, Ohio, 35.06 percent ROI
9. Gulfport, Mississippi, 34.55 percent ROI
10. Erie, Pennsylvania, 33.24 percent ROI
Purchasing successful property in Avondale
Avondale is a suburb of Phoenix, which has an extremely high proportion of renters when compared with the rest of the state. Almost 40 percent of the population choose to rent single-family units rather than buying, according to a Mashvisor report, which makes it an excellent prospect for rentrepreneurs.
What’s more, real estate prices in the area are holding steady, minimizing the buyer’s risk. Phoenix is a booming city with significant job and population growth rates. Rent estate investors will experience a high return on investment when purchasing properties in suburbs like Avondale.
“Phoenix is actually a booming, modern city with real estate investments ready to be seized,” the Mashvisor report states. “The Phoenix real estate market is no longer focused only on retirement homes and condos. Leave this idea behind or else you’ll miss out on some great real estate investing opportunities in Phoenix investment properties!”
Instead, economists recommend looking into single-family homes. The strong Phoenix economy has brought an influx of families in need of rental properties. The real estate inventory for single-family units in this area will be in short supply in 2018 and beyond, so now is a good time to pounce.
“There is a predicted 15% increase in the construction of single-family rental properties for 2018 (about 32,580 new residential real estate properties),” the Mashvisor report continues. “This is good news for Phoenix investors of single-family rental properties. Contrary to this, the Phoenix housing market will see a decrease in the construction of multifamily homes (about 32%). This means more competition for Phoenix investors of commercial real estate property.”
Savvy investors will jump on this opportunity to fill an investment gap with single-family units in Avondale. Be on the lookout for great deals in the area to ensure a high ROI.