Good News For Landlords: Rental Returns Are Surpassing The National Average

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Peoples Home Equity shares new of how some areas in America are earning landlords more than the national average.

Lenders like Peoples Home Equity and potential home buying investors are intrigued by the results of a recent rental market analysis issued by RealtyTrac July 3rd titled "REALTYTRAC RANKS BEST OVERALL MARKETS FOR BUYING RESIDENTIAL PROPERTY RENTALS AND RENTING TO BOOMERS, MILLENNIALS".

According to the analysis, the rental market is earning current landlords returns of more than the average of 10%. Among the 370 counties analyzed, there were two that showed returns way above the national average.

Landlords in Anderson Country,S.C, received returns of 15.3% for their rental units of median three bedroom homes. This profit is very reasonable considering that to buy this kind of home would cost less than $70.000, while renting it is around $900 a month.

The second county with very satisfactory results was Woodbury County in Iowa where the median home prices were less than $84,250 while the rents are about $914 a month (a 13% annual return).

While analyzing the rental market in U.S. counties, RealtyTrac took in consideration average rents per month, median home prices and unemployment rates and compared the results to the national average of 10% in returns. In the Anderson County area, they realized that the low 4.3% unemployment rate was one of the main factors for their very strong rental market, and according to the data this factor is going to help the future profits of landlords and contribute in the housing market improvement.

The analysis is important for the fact that it directs potential investors to more profitable markets by suggesting them to take into consideration the unemployment rate of the area. When it comes to demographics, the investors should look for areas with millennials and baby boomers, since is it usually them who decide the environment of local housing markes.

Lenders like Peoples Home Equity are glad to hear that landlords are earning above national average rates of return because it attract investors. In addition, it encourages current tenets to stop paying rent and purchase a home of their own. This combination of expected home buying demand from investors and current tenants should lead to a higher number of mortgage applications in the future.

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Giorgio U Ferrero
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