Finding Strong Rental Markets
Hello Everyone!
I'm new to bigger pockets and am still navigating the site. I have several rental properties in my area currently.
I'm looking for property in Florida, mainly the Sarasota or Ft Myers area. What is the most effective way to locate areas with the highest rental potential?
I'm basically asking if you are coming into a new area how do you begin the research?
I have some ideas, but would love some feedback.
I'm looking to buy and use it for short term and long term rental.
Thank, Will
Hi @William Staton, there are quite a few ways to condfuct research on prospective areas.
One way is to connect with a local investor-friendly agent. They should tell you which neighborhoods to avoid and which could be attractive.
Another way is to look up statistics from the Bureau of Labor Statistics and the U.S. Census Bureau.
Additionally, tools such as Rentometer and AirDNA can help you get an idea of the income generated by prospective properties.
Hope this helps! Let me know if I can be of any assistance.
Hi William,
Welcome to BP!
There is really no easy answer to this, but you need to do your due diligence into the area's you are looking at. A couple of big questions are what area's are you looking at, are you looking at Class A,B,C or D neighborhoods? How much cash flow are you targeting? Are you targeting a cash flow rich environment, or do you want to gear more towards appreciation?
I think once you answer a few of the basic questions, you can start looking into more specific area's and start analyzing properties. Once you really dig into the area, i would start pulling comps in the area & see what they are renting at. You can also at "tools" above, go to "Rent Estimator" put in the address and it will give you a rough estimate of rent in the area given there is enough data.
From there, i would pull school & prop tax from the previous year and plug it into my rental calculator on BP. I closed on a duplex a few months ago using this method & was less than 50 dollars off on my calculations of what i'd be paying. Lastly, connect with a rockstart team (Lender & Realtor) in the FL area you are trying to invest to get a better idea of trends & the right places to be.
Sorry for the ranting of info, but if you have any questions please reach out!
Welcome to BiggerPockets, William! You found the right place for information.
- Engineered Tax Services
- (561) 253-6640
- http://www.Engineeredtaxservices.com
I've created a Free Investment Property Analysis Tool that includes a HUD fair market rent data by area lookup. Just open the calculator, scroll down to "Revenue Assumptions", click "Show Rent Lookup", select "Florida" from the state dropdown and "Sarasota County" (or another county) from the county dropdown. In another tab, use Zillow to search for realistic purchase prices in your selected county. Input the purchase price you found on Zillow into the calculator and use the values from the calculator's rent lookup tool to estimate your Gross Monthly Rents.
This approach should give you a better picture of an area's overall potential than just rental rates alone. Cheers!
Or you can take 30 seconds to filter by all the zip codes in the US using VestMap.com's ZipFinder
. I personally select B class areas with growth. I would use the attached zip code map as a guide. You can see the criteria on the left.
Quote from @William Staton:I think there are 2 big things I look for
Hello Everyone!
I'm new to bigger pockets and am still navigating the site. I have several rental properties in my area currently.
I'm looking for property in Florida, mainly the Sarasota or Ft Myers area. What is the most effective way to locate areas with the highest rental potential?
I'm basically asking if you are coming into a new area how do you begin the research?
I have some ideas, but would love some feedback.
I'm looking to buy and use it for short term and long term rental.
Thank, Will
#1) Look at population growths. Is there an increase in growth in that area?
#2) Look at where big corporations are moving. They pay people to find good markets that will profit and keep growing. For example, here in Ohio we have Amazon, The Limited, Intel, Chipotle, and more. There is a reason those companies have choose to come here and are continuing to come.
There are a few websites to check out but I would consult with a local Realtor and PM as they would know first hand. @William Staton
Hello All,
I have received an absolutely great response and the information really helped. I've already reached out to a realtor from Bigger pockets Realtor list to get the ball rolling. Thank you very much for everyone's input!
-Will
Quote from @William Staton:
Hello All,
I have received an absolutely great response and the information really helped. I've already reached out to a realtor from Bigger pockets Realtor list to get the ball rolling. Thank you very much for everyone's input!
-Will
Glad to hear it! Best of luck with your investment.