The inaugural Rental Ranking Report from All Property Management features insights into the attractiveness of real estate investment in 75 major U.S. metropolitan areas, over all four quarters of 2015. The higher a metropolitan area’s ranking, the better ROI for rental housing within it. The report includes a breakdown of regional performance trends and a look into early indicators for Q1 2016 and the rest of the coming year.
Online management referral service All Property Management calculated its results from a combination of U.S. real estate, rental housing and jobs reports, along with property appreciation forecasts. To download the report, click here.
The Rental Ranking Report is calculated with a combination of U.S. real estate, rental housing and jobs reports, along with property appreciation forecasts. A comparison of quarter-over-quarter and year-over-year data is analyzed to discover how rental markets are changing. The nine indicators that are used include: vacancy rate, rent variance, capitalization rate, property appreciation, job growth, days on market, future rental availability index, job availability index, and tax and insurance cost index.
With the U.S. homeownership rate falling to its lowest rate since 1967 in July 2015, this has been a banner year for many rental property owners, with vacancy rates at their lowest since 1993. The rental market in the U.S. reached $173B in 2016, and although rents rose significantly, they still increased at a lower rate than that of the median U.S. home price. In addition to these market statistics, some of the results from this year’s report include:
Top Performing Metros
- The top five performing metros for the past year include: San Francisco (CA), Seattle (WA), San Jose (CA), Louisville (KY) and San Diego (CA)
Top Performing Region
- The Western U.S. is currently the best region for rental property investment, thanks largely to the impressive rent increases and property value appreciation found there.
- Worcester (MA) had the lowest vacancy rate with 3.05%, and Birmingham (AL) came in the bottom spot with a 17.67% vacancy rate.
- The percent change in median rent was best in Buffalo (NY) at 16% and worst in Hartford (CT) at -6%.
The report also looked at other factors pertaining to the quality of real estate investments. Some additional data points include the capitalization rate, or the comparison of median rental prices to median property values (Dayton (OH) had the highest percentage at 13.15%) and property appreciation, where San Francisco (CA) had the highest percentage at 7.34%.
The report also looked into job growth (San Jose (CA) had the highest growth at 19.11%), days on the market (San Francisco (CA) had the lowest number of days at 33) and future rental availability, where Austin (TX) experienced the best percentage at -1.47%. Finally, the research also included data on job availability, where it compared population numbers to current job openings (San Jose (CA) had the highest availability at 36), and the cost of insurance premiums and property taxes, where Salt Lake City (UT) came in with the lowest cost.