According to CoreLogic Chief Economist Dr. Frank Nothaft, single-family rental stock has been booming in recent years, with CoreLogic reporting [1] an increase by more than one-third over the past decade. But like the old saying goes, rental investment is all about location, location, location. So what are the best housing investment markets for 2018?
Forbes [2] recently partnered with Local Market Monitor [3], which tracks more than 300 housing markets, to spotlight the 20 bests markets for rental investment in 2018. In each case, the cities in question feature growth amongst population, jobs, and home prices. As Forbes explains, “These are not necessarily the places where prices will grow the most in the near future. … Rather, these are the places where that growth appears most sustainable over the medium to long term.”
Orlando, Florida, tops the list, with an average home price of $247,550, a three-year population growth of 7.6 percent, and a three-year price growth forecast of 35 percent. Orlando home prices increased 9 percent in 2017. “Orlando has recovered in the sense that job growth has been strong and home prices are moving up along with income at a healthy pace," said Local Market Monitor CEO Ingo Winzer. "Home prices are still below the peak of the bubble, so in that narrow sense they haven't recovered."
Rounding out the top 10, Forbes and Local Market Monitor’s picks for best U.S. metros for rental investment in 2018 are:
- Provo-Orem, Utah—Three-year price growth forecast: 31 percent
- Jacksonville, Florida—Three-year price growth forecast: 20 percent
- Raleigh-Durham, North Carolina—Three-year price growth forecast: 26 percent
- Ogden-Clearfield, Utah—Three-year price growth forecast: 29 percent
- Nashville-Davidson-Murfreesboro, Tennessee—Three-year price growth forecast: 27 percent
- Atlanta-Sandy Springs-Marietta, Georgia—Three-year price growth forecast: 24 percent
- Springfield, Missouri—Three-year price growth forecast: 14 percent
- Fort Worth-Arlington, Texas—Three-year price growth forecast: 26 percent
- Sacramento-Arden-Arcade-Roseville, California—Three-year price growth forecast: 33 percent
“High-growth markets are always attractive,” said Winzer. However, “in a few years today's growth markets may be in over-priced territory. Markets with medium growth can also be a better bet for investors because there's less competition for choice properties and they can buy at a more favorable price.”
America’s Rental Housing 2017 [4], a report compiled by Harvard University’s Joint Center for Housing Studies [5], reported last year that renter households are trending older, wealthier, and are more likely to be parents. The abundant prospects of the rental market will be one of the hot topics to be discussed at this year’s Single-Family Rental Summit, happening March 19-21 at the Renaissance Nashville Hotel in Nashville, Tennessee. For more information, and to register, click here [6].