Rental Ranking Report
What are Rental Ranking Reports?
They measure the attractiveness of real estate investment in U.S. metropolitan areas. The higher a metropolitan area's ranking, the better the ROI for rental housing in that metropolitan area.
Q2 2015 Rental Report
The Western U.S. is once again the most attractive region for rental real estate investment. A number of smaller metros, like Springfield, MA, also managed to achieve high rankings.
Why should I care about Rental Ranking Reports?
Is rental housing a good investment in your city? Which U.S. cities yield the highest returns for rental housing?
These are questions every rental property owner and investor must ask themselves, and the purpose of the Rental Ranking Reports is to provide them with answers. These reports consider the latest government statistics on vacancy rates, rent increases, property value appreciation and other factors that have the greatest impact on the ROI for rental housing.
How are Rental Ranking Reports calculated?
- First, we combine U.S. real estate, rental housing and jobs data with property value appreciation forecasts.
- Next, we compare data quarter-over-quarter and year-over-year to find how rental markets have changed.
- Last, our nationwide network of 2,000 property managers verifies our findings.
What are the Rental Ranking Report inputs?
- Vacancy Rate Good = Low %
- The amount of unoccupied units in the metropolitan area.
Low vacancy rates indicate a high demand for housing.
- Rent Variance Good = Higher %
- The percent change in the median rent within the metropolitan area.
A high rent variance indicates rents have significantly increased.
- Capitalization Rate Good = High %
- Compares median rental prices to median property values.
Rental housing is most profitable in metropolitan areas with high "cap rates".
- Property Appreciation Good = High %
- The percent change of property values within the metropolitan area.
The higher the property value appreciation, the more rental housing owners’ properties are worth.
- Job Growth Good = High %
- The percent change of available jobs in the metropolitan area.
Job growth is one of the best indicators of a housing market’s strength.
- Days on Market Good = Lower
- The median number of days a property takes to sell.
The stronger a housing market, the fewer days it takes homes to sell there.
- Future Rental Availability Index
- Ranks metropolitan areas by comparing their population growth to the amount of housing under construction within them. The higher the future housing shortage, the more rental housing owners will be able to charge for their units.
- Job Availability Index
- Ranks metropolitan areas by the ratio of population to current job openings. A low ratio indicates high future job growth (and therefore population growth), in turn indicating high future demand for rental housing.
- Tax & Insurance Cost Index
- An aggregate ranking of annual homeowner insurance premiums and property taxes, two significant costs that impact the ROI of rental housing.
Past Rental Ranking Reports