Popular areas for SFH investors in NWA

Fayetteville, Arkansas
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Popular areas for SFH investors in NWA

Jennifer Schelkopf
Investor 路 Bella Vista, AR 路 Member since 2015 路 67 posts 路 47 votes

Are you wondering which areas of Northwest Arkansas you should invest in? Me too!

To help answer this question, I wanted to know the areas where other investors are buying. I thought others might appreciate seeing what I found.

I looked at non-owner occupied SFH sales data over the past 3 months and found:

* Fayetteville had the most sales, but 72730 (Farmington area) had significantly less sales than other zip codes in Fayetteville

* Springdale was the second most popular, followed by Rogers, Bentonville, and Bella Vista

* 72764, the Springdale area east of W. End St (which includes part of Beaver Lake), had significantly more sales than 72762 (west of W. End St)

* The 72756 zip code (northern Rogers, including Downtown) had significantly more sales than 72758 (southern Rogers, including the areas around Mercy and Pinnacle Hills Promenade)

Raw data:

ZIP Code County Population City SFH Sales
72712 Benton 40,933 Bentonville 73
72756 Benton 38,455 Rogers 45
72701 Washington 39,782 Fayetteville 37
72703 Washington 28,261 Fayetteville 35
72758 Benton 33,487 Rogers 35
72762 Washington 35,342 Springdale 33
72715 Benton 15,051 Bella Vista 32
72704 Washington 21,336 Fayetteville 31
72714 Benton 11,880 Bella Vista 29
72764 Washington 50,230 Springdale 27
72764 Washington 50,230 Springdale 27
72745 Benton 11,376 Lowell 12
72719 Benton 8,975 Centerton 11
72730 Washington 7,585 Fayetteville 9
72718 Benton 1,465 Cave Springs 8

Pretty graphs:

I am not a real estate agent, and I don't have access to MLS. I used ListSource to pull this data, as recommended in the book "Finding and Funding Great Deals" by Anson Young.

For those of you who are familiar with Northwest Arkansas, was there anything that surprised you about this?

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    Ryan Blackstone
    Real Estate Broker 路 Fayetteville, AR 路 Member since 2017 路 375 posts 路 240 votes
    5y

    @Jennifer Schelkopf The main demand that is driving people out there is 1. utility accessibility. You really couldn't build before they figured out the sewer STEP system. 2. Accessibility to the city and the airport. Most people that live and cave springs I believe are those who are white collar and fly out on a weekly basis. The reason I think SFH and MFH are good there, is because there is such a demand to be there, and no supply. Even big SFH builders who sell an affordable house are making more money there, than in other areas in NWA. This is just due to the high demand. I see it as being a great place for people who work here for 3 years and then are going to move to a new job and get promoted. So, they will be more likely to rent. I think rent-o-meter data is good it just doesn't show the absence of data not there. The spike in the data is probably because all of those houses are big houses like you said. Bentonville doesn't make sense to me.... it should have the highest rent rates.... but it doesn't... However, I think it has the greatest future potential.

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    • Chaia ZellermayerPro Member
      Prairie Grove, AR 路 Member since 2015 路 9 posts 路 3 votes
      5y

      @Jennifer Rullman no the numbers make sense

      1Reply
    • Stefan De Jong
      Realtor 路 Bentonville Arkansas 路 Member since 2018 路 11 posts 路 5 votes
      5y

      These numbers seem accurate, I am a Realtor and currently looking into buying our first SFH investment property.
      But it seems very hard to find properties where the numbers make sense in the current market.
      Home prices have risen so fast in the last 6 months, and rents seem to be lagging behind which makes it very hard to get a good return on investment.

      2Reply
    • Ryan Blackstone
      Real Estate Broker 路 Fayetteville, AR 路 Member since 2017 路 375 posts 路 240 votes
      5y

      Awesome data. No surprises; however, I will say Cave Springs would be a great place to build and invest for multi-family. or affordable investment grad SFH's. There isn't much out there, but the demand is high.

      2Reply
    • Leigh Jones
      Member since 2019 路 31 posts 路 14 votes
      5y

      I bought a SFR in a small Bentonville neighborhood in Oct 2019. I paid ask price, BUT it didn't need any work, and it is 2 miles from where the new Walmart Home Office will be....so it will NEVER be vacant as long as Walmart is here. Funnily enough though, my renters so far have not been Walmart HO employees. Rent $1095, PITI $735 (25% down), Prop mgmt 10%. In Brandon's terms, this isn't a "home run"... I'd call it a "single". I'm looking to stack though. I've been eyeing Ft Smith because the properties are way cheaper. Who wants to partner? ;-)

      1Reply
    • Jennifer Schelkopf
      OP
      Investor 路 Bella Vista, AR 路 Member since 2015 路 67 posts 路 47 votes
      5y
      Originally posted by @Ryan Blackstone:

      Awesome data. No surprises; however, I will say Cave Springs would be a great place to build and invest for multi-family. or affordable investment grad SFH's. There isn't much out there, but the demand is high.

      A month ago I used Rentometer to pull average rents for 3 bd, 1.5+ bath in various places around NWA. The numbers showed that Cave Springs demanded higher rent than even Bentonville. Unfortunately, the sample size for Cave Springs was very small. The report showed 11 rentals there, compared to 200+ in other cities.

      Here's what the data showed:


      Here's the raw data:

      Area

      25% Percentile

      Median

      75% Percentile

      Bentonville

      1142

      1300

      1578

      Springdale

      1034

      1250

      1505

      Rogers

      1101

      1299

      1544

      Lowell

      1214

      1350

      1682

      Cave Springs

      1800

      2150

      3648

      Fayetteville

      1116

      1350

      1584
      I've browsed through some of the rentals in the Cave Springs data, and many are very large executive homes. I'm guessing that executives associated with the large employers in the area, along with their vendors, are renting these homes.

      @Ryan Blackstone, you mentioned that Cave Springs would be good for MFH or affordable SFH. That makes me think this Rentometer data is not accurate, since it shows such high rents for Cave Springs. Given the low sample size that wouldn't be surprising. What do you think is driving demand in Cave Springs, and what is the typical renter profile there?

      0Reply
    • Ryan Blackstone
      Real Estate Broker 路 Fayetteville, AR 路 Member since 2017 路 375 posts 路 240 votes
      5y

      @Jennifer Schelkopf The main demand that is driving people out there is 1. utility accessibility. You really couldn't build before they figured out the sewer STEP system. 2. Accessibility to the city and the airport. Most people that live and cave springs I believe are those who are white collar and fly out on a weekly basis. The reason I think SFH and MFH are good there, is because there is such a demand to be there, and no supply. Even big SFH builders who sell an affordable house are making more money there, than in other areas in NWA. This is just due to the high demand. I see it as being a great place for people who work here for 3 years and then are going to move to a new job and get promoted. So, they will be more likely to rent. I think rent-o-meter data is good it just doesn't show the absence of data not there. The spike in the data is probably because all of those houses are big houses like you said. Bentonville doesn't make sense to me.... it should have the highest rent rates.... but it doesn't... However, I think it has the greatest future potential.

      4Reply
    • Jennifer Schelkopf
      OP
      Investor 路 Bella Vista, AR 路 Member since 2015 路 67 posts 路 47 votes
      5y
      Originally posted by @Stefan De Jong:

      These numbers seem accurate, I am a Realtor and currently looking into buying our first SFH investment property.
      But it seems very hard to find properties where the numbers make sense in the current market.
      Home prices have risen so fast in the last 6 months, and rents seem to be lagging behind which makes it very hard to get a good return on investment.

      This!! I recently moved to NWA, and I'd like to base my portfolio here. But it's been very difficult to find deals.

      I'm trying direct mail to see if that creates some opportunities. My first mailing will go out today, so fingers crossed 馃

      1Reply
    • Kirby Davis
      Fayetteville, AR 路 Member since 2018 路 95 posts 路 62 votes
      5y

      I鈥檓 also in NWA, and I agree with the rest of you - the rent here doesn鈥檛 work with the housing prices. Looking elsewhere for better returns but always keeping my eyes open for something here that makes sense. 

      1Reply
    • Kirby Davis
      Fayetteville, AR 路 Member since 2018 路 95 posts 路 62 votes
      5y
      Originally posted by @Leigh Jones:

      I bought a SFR in a small Bentonville neighborhood in Oct 2019. I paid ask price, BUT it didn't need any work, and it is 2 miles from where the new Walmart Home Office will be....so it will NEVER be vacant as long as Walmart is here. Funnily enough though, my renters so far have not been Walmart HO employees. Rent $1095, PITI $735 (25% down), Prop mgmt 10%. In Brandon's terms, this isn't a "home run"... I'd call it a "single". I'm looking to stack though. I've been eyeing Ft Smith because the properties are way cheaper. Who wants to partner? ;-)

       Considering Fort Smith for the same reason - better returns. 

      0Reply
    • Chris W McLellanPro Member
      Investor 路 Fayetteville, AR 路 Member since 2019 路 4 posts 路 2 votes
      5y

      I just bought a duplex as a house hack in Fayetteville. The rents need to come up to make it cash flow well.  Ft Smith is attractive for several reasons but I鈥檓 concerned about the general economic conditions there. I鈥檇 love to hear from anyone who has experience down there 

      1Reply
    • Ryan Blackstone
      Real Estate Broker 路 Fayetteville, AR 路 Member since 2017 路 375 posts 路 240 votes
      5y

      I personally don't like Ft. Smith, because of the Economy. I like NWA because of the economic security. However, there is always a deal. Now, I probably wouldn't buy anything in Fort Smith unless I can get the 2% rule just because I don't think rents and value will rise as much as NWA. 

      1Reply
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