Where It Pays To Be A Landlord

Although we believe Zillow should not be used to generate current comparable property sales data, the platform touts one of the best free databases for available property information on the residential real estate market.

Zillow recently published an article, written by Jamie Anderson,  titled, “Return on Rent: In Most Major Markets, Most Homes Can Be Rented Out For A Profit.” It shared some valuable insight on how strong the rental market can be, but the importance of focusing on markets that will give investors the most return for their money.

According to Zillow, 25 of the 35 biggest markets in the U.S. have property available that can be purchased by a small investor and rented out for profit, BUT, in a handful of expensive markets (Zillow noted: West Coast and the Northeast), inflated purchase prices mean a decreased likelihood that costs can be covered by rent.

The article also mentioned that, “it can be all-too-easy for smaller-scale investors to become cash poor when a property’s monthly expenses regularly exceed its monthly revenue. In these instances, the property owner can wind up trading liquidity – the immediate cash they have on hand to pay for the monthly expenses – for gains in home equity only realized over a longer term when a property is sold.”

For experienced investors, or anyone that tends to grasp financial literacy at a higher level than the average person, this seems to be commonsensical. But, a lot of investors use real estate as a passive investment vehicle to supplement their current income stream, which doesn’t allow plentiful free time to study market trends from specific regions to ensure that the risk of their investment is minimized. It is important to have the time to exercise adequate due diligence, or rely on professionals, such as turnkey companies, like KC Metro Homes, to do it for them.

Turnkey Investment Real Estate Firms, such as ours, make sure that market research is done consistently and thoroughly. Even if you feel confident investing on your own, give a turnkey company a shout to get their professional opinion about the health of certain rental markets. At KC Metro Homes, we are proud to provide investment property in one of the best rental markets in the country.

Please view the graph Zillow posted: