Best rental markets vs. population growth

[Trevor Ewen]

Last night, I decided to put together a look at RealtyTrac's 'Best Rental' markets vs. population growth.

Using US Census data, I was able to see the 5 markets in the 'Best Return' list that have had the highest population growth since 2010. Here they are in order of adjusted return:

Atlanta-Sandy Springs-Marietta, GA (29.76%)
Kansas City (22.4%)
Pittsburgh (21.08%)
Tampa, St. Petersburg, Clearwater (21.02%)
Ithaca, NY (19.32%)

It's also nice to know that the list seems a bit more sane when you look at it this way. I would consider myself lucky to live in any of these 5 markets.

[Mike D'Arrigo]

@Trevor Ewen This is an interesting post. I like how you compare the top markets for gross yield with the top markets for population growth. I just finished a comprehensive review of 40 markets looking at economic and demographic trends compared with rental returns. I think the RealtyTrac data overstates the gross returns in a lot of markets though. For instance, I don't know where in Detroit you can get $1,144 rent on a $44,900 property. Using their data, Atlanta would look like the best investment market which may have been true 3 years ago but certainly not the case today as measure by cash flow and gross yield. The interesting thing is that it leaves Indianapolis off the list entirely. I think Indy is one of the top markets when you evaluate economic strength with rental returns. People who aren't familiar with Indianapolis are always surprised at how strong the economy is there. Combine that with some of the lowest housing prices in the nation and you have a great investment opportunity. I looked at 16 economic factors in 40 markets. My favorites in no particular order are Indianapolis, Kansas City, Columbus, OH, Omaha, NB, Oklahoma City, Tulsa, OK, Des Moines, IA. Feel free to contact me if you'd like more details on my findings.