For investors looking to get into the real estate market, one factor should be considered above all others: location, location, location. RealtyTrac has combed the country to find 25 “hidden gem” markets — areas that are little-known, aren’t swarming with big institutional investors, and boast sizeable yields.
The firm based its study on a combination of five factors: median home value, unemployment, median rental value, institutional investor sales, and gross yield.
In the markets that made up the cream of the crop, institutional investor purchases accounted for 5% or less of all residential sales (the less competition from big players, the better, for average investors) in the three-month period ending in July, and the unemployment rate was 7.5% or lower.
“Buying single family homes as rentals still yields solid returns in many markets across the nation, but it is difficult for individual investors and even small-to medium-sized institutional investors to find reasonably priced inventory in markets dominated by the 800-pound gorillas in the single-family rental space,” said Daren Blomquist, vice president at RealtyTrac. “With this analysis, we’ve identified the top overlooked markets where single family rentals still make good financial sense but where there is little to no competition from the big players.”
25. Shelby County, Ala.: Gross yield for real estate investors is 9.1%.
Investor sales: 1.9%
Unemployment: 4.5%
Median home value: $157,000
Median rent value: $1194
Gross yield: 9.1%
24. Madison County, Ala.: Gross real estate investor yield totals 9.2%.
Investor sales: 4.3%
Unemployment: 6.0%
Median home value: $126,000
Median rent value: $961
Gross yield: 9.2%
23. Waukesha, Wisc.: Gross yield for real estate investors is 9.2%.
Investor sales: 1.0%
Unemployment: 6.3%
Median home value: $208,000
Median rent value: $1595
Gross yield: 9.2%
22. Newport News, Va.: Gross real estate investor yields total 9.2%.
Investor sales: 4.1%
Unemployment: 6.8%
Median home value: $167,000
Median rent value: $1286
Gross yield: 9.2%
21. Saint Charles County, MO: Gross real estate investor yields total 9.4%.
Investor sales: 3.8%
Unemployment: 6.1%
Median home value: $158,000
Median rent value: $1232
Gross yield: 9.4%
20. Washington County, Penn.: Gross yield for real estate investors totals 9.4%.
Investor sales: 1.8%
Unemployment: 7.3%
Median home value: $141,000
Median rent value: $1106
Gross yield: 9.4%
19. Litchfield County, Conn.: Gross yield for real estate investors is 9.4%.
Investor sales: 2.3%
Unemployment: 7.3%
Median home value: $228,000
Median rent value: $1790
Gross yield: 9.4%
18. Escambia County, Fla.: Gross real estate investor yield totals 9.4%.
Investor sales: 4.3%
Unemployment: 7.1%
Median home value: $116,000
Median rent value: $913
Gross yield: 9.4%
17. Santa Rosa County, Fla.: Gross real estate investor yield totals 9.5%.
Investor sales: 3.7%
Unemployment: 6.7%
Median home value: $145,000
Median rent value: $1153
Gross yield: 9.5%
16. Charles County, Md.: Gross real estate investor yield totals 9.5%.
Investor sales: 1.4%
Unemployment: 6.9%
Median home value: $219,000
Median rent value: $1742
Gross yield: 9.5%
15. Kent County, Mich.: Gross real estate investor yield totals 9.7%.
Investor sales: 2.9%
Unemployment: 6.9%
Median home value: $116,000
Median rent value: $936
Gross yield: 9.7%
14. Shawnee County, Kan.: Gross real estate investor yield totals 9.8%.
Investor sales: 4.7
Unemployment: 6.2%
Median home value: $106,000
Median rent value: $864
Gross yield: 9.8%
13. Lake County, Ohio: Gross real estate investor yield totals 9.8%.
Investor sales: 2.2%
Unemployment: 7.1%
Median home value: $127,000
Median rent value: $1036
Gross yield: 9.8%
12. Boon County, Mo.: Gross real estate investor yield totals 9.8%.
Investor sales: 3.5%
Unemployment: 5.3%
Median home value: $141,000
Median rent value: $1154
Gross yield: 9.8%
11. Summit County, Ohio: Gross real estate investor yield totals 9.8%.
Investor sales: 2.8%
Unemployment: 7.1%
Median home value: $107,000
Median rent value: $876
Gross yield: 9.8%
10. Allegheny County, Penn.: Gross real estate investor yield totals 9.8%.
Investor sales: 2.9%
Unemployment: 6.9%
Median home value: $126,000
Median rent value: $1034
Gross yield: 9.8%
9. Jefferson County, La.: Gross real estate investor yield totals 9.9%.
Investor sales: 3.0%
Unemployment: 7.3%
Median home value: $153,000
Median rent value: $1260
Gross yield: 9.9%
8. Schenectady, NY: Gross real estate investor yield totals 10%.
Median home value: $153,000
Median rent value: $1278
Investor sales: 2.2%
Unemployment: 6.9%
Gross yield: 10.0%
7. Alachua County, Fla.: Gross real estate investor yields total 10.1%.
Median home value: $139,000
Median rent value: $1175
Investor sales: 4.3%
Unemployment: 5.9%
Gross yield: 10.1%
6. Davidson County, Tenn.: Gross real estate investor yield totals 10.2%.
Median home value: $149,000
Median rent value: $1263
Investor sales: 5.3%
Unemployment: 7.1%
Gross yield: 10.2%
5. Monroe County, N.Y.: Gross real estate investor yield totals 10.3%.
Median home value: $121,000
Median rent value: $1,043
Investor sales: 2.5%
Unemployment: 7.0%
Gross yield: 10.3%
4. Austin-Round Rock, Texas: Gross real estate investor yields total 10.7%.
Median home value: $158,000
Median rent value: $1403
Investor sales: 4.7%
Unemployment: 5.7%
Gross yield: 10.7%
3. Canadian County, Okla.: Gross real estate investor yields total 10.8%.
Median home value: $131,000
Median rent value: $1176
Investor sales: 3.7%
Unemployment: 4.9%
Gross yield: 10.8%
2. Lubbock County, Texas: Gross real estate investor yield totals 11.8%.
Investor sales: 4.9%
Unemployment: 6.1%
Median home value: $111,000
Median rent value: $1,089
Gross yield: 11.8%
1. Wichita Falls, Texas: Gross real estate investor yield totals 13.4%.
Investor sales: 4.5%
Unemployment: 6.8%
Median home value: $84,000
Median rent value: $938
Gross yield: 13.4%