Home to more than just great steaks and the College World Series, Omaha is known for its midwestern hospitality, low cost of living, diverse economy, and vibrant culture. It was also named in 2014 as the second-least congested big city in America and the top city in America to raise a family.
Q2 2015 Omaha Rental Market Update
In Q2 2015, Omaha was the sixth-best Midwestern housing market to own rental properties in and 36th-best in the country as a whole. Since Q1 2015, Omaha jumped three spots in the Rental Ranking Report's regional rankings for the Midwest and four spots in the national rankings.
The Omaha rental real estate market is unfortunately far from perfect. Omaha rental prices are increasing at a rate far less than the national average; in Q2 2015, they improved by just 3.24 percent, about 35 percent less than the national average for that metric. Property values in Omaha also appreciated at a below-average pace - 4.48 percent compared to the national average of 5.08 percent. Omaha's sluggish annual job growth rate of 1.15 percent, which was around 43 percent less than the Q2 2015 national average, offers more proof that demand for housing in "The Big O" isn't particularly strong.
Regardless, Omaha rental real estate can still be a lucrative investment. The average capitalization rate, a statistic that compares annual rents and property values that is commonly used by investors to gauge the attractiveness of rental properties, was a moderately high 7.39 percent for Omaha rental real estate in Q2 2015. Omaha also benefits from a remarkably low median age of housing inventory, 44 days (about three weeks less than the national average), and a slightly below-average vacancy rate of 6.50 percent. Taken together, these statistics indicate that demand for Omaha housing is great enough that rental property owners can earn significant returns there, both now and likely for many quarters to come.
Q1 2015 Omaha Rental Market Update
Omaha ranked around the middle of the pack - 40th of 75 markets - in the Q1 2015 Rental Ranking Report. That's a big jump down from its ranking in the last Rental Ranking Report, but doesn't indicate that the ROI on Omaha rental housing has suddenly become abysmal. It has a solid cap rate of 7.9 percent, slightly higher than the national average of 7.18 percent. Omaha properties tend to sell relatively fast, too, with a median of 52 days on the market from list to close (compared to 70 for the U.S. as a whole). This low days on market figure indicates that demand for Omaha housing is relatively strong, a boon for rental prices.
Omaha's rental market also benefits from its relatively steady economy. It's not as prone to wild swings as places like Phoenix and Las Vegas. Rather, Omaha rental properties have historically been consistent performers in terms of their ROI with few major surprises compared to other areas of the country.
What data is this Rental Ranking Report based on?
To calculate the statistics found in the Q2 2015 Rental Ranking Report, All Property Management gathered data, including the most recent government housing and jobs data, for 75 metros across the United States. Specifically, we looked at home vacancy, capitalization, home value appreciation and job growth rates, changes in rental prices, and the average number of days properties have been on the market to determine which U.S. metros will give investors the highest returns on rental investments. Click here to learn more about the Rental Ranking metrics.
Should I invest in Omaha rental property?
Omaha's strong capitalization rate indicates that investment properties there can deliver attractive returns on investment for skillful and patient investors. Furthermore, as Omaha continues to earn accolades for its excellent quality of life and positive business climate, you can expect demand for quality rental properties to continue to increase.
Thinking about renting out a property in Omaha? Save time, avoid hassle and maximize your rental income by having a professional property management company operate your rental property for you. Click here to get a free quote from a local property manager or call 877-780-4510 to have the All Property Management staff get quotes for you.
All Property Management specializes in connecting rental property owners with professional property managers in communities across the United States. These property managers help set rental rates, advertise properties, screen and manage tenants, collect rent, manage vendor relationships and ensure compliance with local, state and federal housing regulations. They take the hassle and worry out of managing rental properties - all while maximizing rental property owners' rental incomes.