What’s your market like?
If you are located in one of the hot areas around the country, you might be wondering where all the good deals have gone to. Are the hedge funds really buying up everything and causing prices to skyrocket to unmanageable levels everywhere? Not according to a new study released today by RealtyTrac that looks at the top 20 markets to buy single family homes in today, based on cap rates and cashflow. In fact, there are some areas where significant cashflow is still achievable.
In a statement released by RealtyTrac, VP Daren Blomquist discussed the problem and what they’ve found:
“Buying single family homes as rentals that actually generate good monthly cash flow has become more difficult over the past year as institutional investors crowded into the market, snapping up tens of thousands of properties in 2012 alone,” said Daren Blomquist vice president at RealtyTrac. “But there are still opportunities for the more conservative, individual investor to buy rental homes that generate a healthy return on investment — it often just takes persistence and willingness to pass on bad deals. The top 20 markets we selected represent the best chance to buy rental homes that generate good cash flow, but opportunities are available in most markets across the country given the combination of relatively low prices, low interest rates and a strong rental market.”
The 20 Best Markets for Single Family Homes
According to their findings, Memphis, TN leads the pack with a “cash-purchase cap rate” averaging 10.38%, followed closely by Saginaw, MI and Toledo, OH. The following charts offer more details into the study:
For more information on the study by RealtyTrac, click here.
How does your city stack up? What do you think about the findings in this report? Share your thoughts below!