Greenbook: A Local Guide to Chesapeake Living - Issue 5 | Page 52

Market update
greenbook
J. Melvin Premier properties

greenbook | spring 2015

RealtyTrac® recently released
its Q1 2015 Residential Property
Rental Report, which ranks the
best markets for buying
residential rental properties in the
first quarter of 2015. The report
also looks at which markets are
seeing the biggest increases in
rental rates in 2015 compared to
2014, and provides rankings of the
best safe haven residential rental
markets, along with the best markets for renting to Millennials, best
markets for renting to Generation
Xers, and best markets for renting
to Baby Boomers.

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“With homeownership rates at
their lowest level in 20 years, historically low levels of
housing starts and relatively low
home prices in many parts of the
country, there is still plenty of
opportunity in the U.S. housing
market for single family rental
investors employing a variety
of investing strategies,” says
Daren Blomquist, vice president
at RealtyTrac. “Whether focusing
on markets where homeownershipshy Millennials are migrating,
markets where recovering Gen X
homeowners-turned-renters are
prevalent, or markets Baby Boomers are testing for

retirement, investors can find good
options with solid potential rental
returns.

“There are certainly markets
where buying single family
rentals no longer makes sense
because of rapidly rising prices
over the past few years,”
Blomquist added. “Savvy single
family rental investors will tread
cautiously in such markets despite
the siren song of strong home
price appreciation.”  

For the report, RealtyTrac
analyzed median sales prices for
single family homes and condos
and average fair market rents for
three bedroom properties, along
with unemployment rates and demographic trends in 516 U.S. counties with a combined population of
236 million people — 76 percent of
the total U.S. population. (See full
methodology below.)

The 516-county analysis found
an average potential return on
residential rental properties of
9.04 percent in the first quarter
of 2015, down slightly from an
average potential annual return of
9.06 percent for residential rentals
purchased in the third quarter of

2014—the most recent residential rental property report
issued by RealtyTrac.

Best markets for buying
residential rentals in
Georgia, Maryland, Virginia
and Michigan Markets with
the highest potential rental
returns were Clayton County,
Ga., in the Atlanta metro area
(25.83 percent), Bibb County,
Ga., in the Macon metro area
(22.33 percent), Baltimore City,
Md., (20.99 percent), Richmond
City, Va., (20.42 percent),
and Wayne County, Mich., in
the Detroit metro area (19.34
percent).
Best markets for renting to
Millennials. Among the 516
counties analyzed there were
50 where the millennial share
of the population was above the
national average of 22 percent,
where the millennial population
increased at least 5 percent
between 2007 and 2013, and
where potential
annual rental returns on
residential
properties were 9 percent
or higher. “With the aggressive growth of companies like