Best Markets to Invest in Rental Property Quarterly Rankings

HomeVestors of America and Local Market Monitor, a leading forecaster of real estate markets, launched the "HomeVestors-Local Market Monitor Best Markets to Invest in Rental Property" ranking in July 2011. The ranking helps inform real estate investors of rental real estate investment opportunities. The Best Markets ranking is updated quarterly.

HomeVestors and Local Market Monitor estimate that approximately 14% of single-family homes in the U.S. are maintained as rental properties. The companies believe there is no other regularly produced, reliable national ranking of the expected future performance of homes maintained as rental properties, which makes this ranking particularly useful to prospective investors.

"Since 1996 HomeVestors real estate franchises have been at the forefront of buying older houses in need of repair, and updating or rehabbing them, often in the interest of maintaining the homes as rental properties. Until today, there's never been a reliable national performance indicator for this growing segment of the investment market," said David Hicks, co-president of HomeVestors of America, Inc. "We're pleased to have developed this ranking system with Local Market Monitor to help investors in single-family rental property identify opportunities and gauge potential local market investment performance relative to the national average and other markets."

Top 100 Markets Based on Forecasted Home Price Appreciation and Rental Rate Growth

The "HomeVestors-Local Market Monitor Best Places to Invest in Rental Property" ranking forecasts the expected performance of rental real estate properties, specifically single-family homes maintained as rental properties. The rankings show the extra return, or risk-return premium, that an investor must demand from rental property in a local market. The risk-return premium can be added to the regular capitalization rate to produce a risk-adjusted cap rate at full occupancy for a local market. The ranking is calculated based on three-year forecasts of home prices (reflecting underlying home-price appreciation potential) and gross rents (as a proxy for potential investor cash flow).

The ranking in no way should be considered a guarantee of future investment performance. It is an objectively determined analytic tool intended to help inform real estate investors interested in property investment opportunities.

Top 100 Markets Based on Forecasted Home Price Appreciation and Rental Rate Growth