A new index shows that Grand Rapids, Mich., is the top city in the U.S. in terms of income for residential landlords.
Compiled by All Property Management (APM), the largest online network of property management services, the goal of the new report 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 Grand Rapids is No. 1 in the nation in terms of income potential for investors in residential rental properties.
Grand Rapids was consistently ranked high in all categories due largely to its strong economy. Phenomenal job growth combined with high housing appreciation, capitalization, an annual rent increase of 15.17%, and relatively low 5.23% vacancy rate make the “Furniture City” the best city in the nation for investors to achieve maximum rental property profitability.
Grand Rapids has invested heavily to transition from its blue collar roots to the white collar and lab coat Medical Mile economy it has today, according to Russ VandenToorn of United Properties of West Michigan, These new, higher-paying jobs have resulted in new residents being able to afford higher rent for premium properties.
“With the influx of new careers into the market has come the demand for more quality housing, while at the same time the economic impact to other jobs has meant families transferring out of Grand Rapids who are unable to sell their homes for what they want or need,” VanderToorn says. “These are the new landlords who have decided to turn their homes into investment properties. This has turned out to be profitable because of the price of rentals compared to ‘the cost of their mortgage; they end up with a profit each month.”
“West Michigan is leading the way for increased real estate value, and Grand Rapids is front and center.” Says Brittany Harrison of Real Estate One. “With GDP up two percent in Grand Rapids, it is clear that rental prices are on the rise and occupancy has started to stabilize. Employment and sales are growing in West Michigan, and we are seeing a rental housing boom. With economic growth modest but steady, we find there is a lack of quality housing for the residents of West Michigan. This has allowed us to provide top notch housing that the West Michigan resident demands.”
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.