A new index shows that Albuquerque ranks number three among U.S. cities in terms of income for residential landlords.
Compiled by All Property Management (APM), the country’s largest online network of property management services, the new report’s goal is to help investors make informed decisions based on current marketplace analysis. Factors such as residential vacancy rates, cap rates and annual rent increases were considered, in addition to data from the U.S. Census Bureau, U.S. Department of Housing and Urban Development, U.S. Bureau of Labor Statistics and CoreLogic.
Depicted graphically at the bottom of this page, APM’s Rental Property Management Health Index found that Albuquerque ranks third in the nation in terms of income potential for investors in residential rental properties. While Albuquerque’s job growth is only average, vacancy rates are a relatively low 6.38% and rents are increasing at a healthy 10.53% annually. Even better, real estate investors in Albuquerque can expect high capitalization and housing appreciation rates, making the city the third best place in the country for profitably owning a rental property. Rental rates in Albuquerque are still reasonable compared to income levels, and there are a variety of markets for both tenants and investors to choose from, says Mark Webb of Real Property Management Rio Grande.
“Newer houses can be purchased and rented in nice areas at reasonable rents, providing cap rates of more than 10 percent,” says Webb. “Older, higher priced homes are available in high-demand, lower-inventory neighborhoods and offer strong potential for future sales price appreciation as well as stable cap rates. Since prices have not completely recovered to pre-downturn levels, the right answer is often to rent out your home. A 3-bedroom, 2-bath home hits the sweet spot of demand in nearly every neighborhood of the city for rents and return to the owner.” Albuquerque’s booming economy and expanding job market continues to bring new residents to the high-desert metropolis.
“People are moving into Albuquerque frequently for jobs – we are in a huge market for government and government-related job opportunities. We also notice Lovelace Health Systems and Presbyterian Health are expanding and adding new jobs all the time,” says Steve Reeves of Real Property Management Albuquerque.
“Albuquerque is a bit transitional for a lot of people, so many choose to rent a property versus buying unless they know they will be here for three or more years. Homes haven’t appreciated to pre-recession pricing, so owners are opting to rent out their homes and wait to sell until the market fully rebounds.”
APM’s Rental Property Management Health Index provides essential information to help investors assess the long-term value of rental properties nationwide, according to Steve Cook, award winning real estate journalist and co-publisher of Real Estate Economy Watch.
“Not only does the Rental Property Management Health Index offer investors a quick, comprehensive grasp of the current rental market on a national scale, it provides the type of data that should be most important from a business standpoint, like yearly rent variances and a particular city’s urban development trends,” said Cook. “While other tools may show near term-deals on distress sales, the APM Health Index educates investors on the potential wisdom of investing in any given market for the long term, regardless of temporary price discounts or short-term market trends.”
APM’s new index provides a holistic view to aid potential investors in deciding where to purchase a profitable rental property. Research indicates 65 percent of individual investors plan to purchase additional properties in the coming year, and Wall Street firms have amassed more than $10 billion to invest in an institutional asset class. “As investors look to explore new markets, get out of current markets, or double down, the data from this index will allow them to compare various factors and weigh which ones matter most to them,” said APM CEO Reggie Brown. “Good information is essential for a wise investment, regardless of the investor’s size.”
Founded in 2004, Seattle-based All Property Management, is the largest online network of property management services, connecting tens of thousands of property owners with thousands of licensed property managers across North America each year. All Property Management allows property owners to maximize rental investments by connecting them with professional property managers who can meet their specific property needs, from single family home rentals to multi-unit apartment complexes and homeowners’ associations.