Policygenius recently published a report on the best cities to invest in the United States. It is no surprise that many Florida cities made this list- Palm Bay and Spring Hill were among the top rankings on the list.
Investors are purchasing these investment properties with the goal of generating rental income or appreciation on the property to resale in the future. Although location is agreeably the most important aspect when choosing an investment property, these cities have made the list due to a mix of both location and evaluation of the other key factors. These factors include evaluating rental returns, the location’s rent as a percent of income, job market, vacancy rate, and growth rate.
As the number of renters is steadily increasing, more and more investors are entering the real estate arena. The US Census Bureau estimates that 74% of investment properties used for rental are owned by individual investors. The investments are on the rise; in the 4th quarter of 2021, Investors bought 18.4% of the US homes that were purchased, a record high.
As the real estate market increases, and homes are selling for more, investors are cashing in as rents and appreciations also increase. Floridians have been the most effected, ranking #1 across the United States for rent increase, where the state saw a 29% increase in rent from the beginning of 2021 to the end.
This opens the door to many questions about real estate development. Will rentals be able to find tenants willing to pay their price? How will this affect the turn from renting to purchasing a home? These answers will become clear as the real estate market steadies, and we begin to examine trends further from the pandemic.