Eight of the country’s 20 best markets for investors to purchase single-family rental homes are in Florida, according to a new analysis by RealtyTrac. Analyzing median price and average rental rates in hundreds of metro areas nationwide, the report determined the top 20 markets for buying rentals, based on markets that give investors the biggest returns on three-bedroom homes.
Ocala was fourth on the list, with a cash purchase capitalization rate of 10.23 percent in a market where the median sales price for a three-bedroom home is $75,357. Palm Bay placed sixth, with a 9.77 percent cap rate and a median sales price of $91,950.
Other Florida markets on the list were Jacksonville, Deltona, Tampa, Port St. Lucie, Orlando and Lakeland.
20 best markets to buy single-family rentals (Click to enlarge image)
“Buying single family homes as rentals that actually generate good monthly cash flow has become more difficult over the past year, as institutional investors crowded into the market, snapping up tens of thousands of properties in 2012 alone,” said Daren Blomquist, vice president at RealtyTrac, in a statement yesterday. “But there are still opportunities for the more conservative, individual investor to buy rental homes that generate a healthy return on investment.” —Hiten Samtani