8 American Housing Markets Where Landlords Are Making A Killing On Rent

Rocky mount paul bunyonWikimedia CommonsThis is the Bunyan Muffler Man, named after Paul Bunyan. You can find it in Rocky Mount, North Carolina.

Everyone’s always talking about the insanely high rents in the New York City and San Francisco housing markets.

But that doesn’t mean people with money should scoop up a 5th Avenue condo and rent it out.

Landlords seeking returns need to consider the differential between the cost of the property and the rent they can potentially bring in.

A report by RealtyTrac found that the average returns were actually the highest in high-risk markets, where unemployment and vacancy rates are higher than national averages.

RealtyTrac ranked these US housing markets based on gross rental yield, which is “the average fair market rent of three-bedroom homes in each county, annualized, and divided by the median sales price of residential properties in the third quarter.”

Although rents are high in New York and San Francisco, the property prices are also high, which means that returns are low.

On the other side, these smaller markets have low property prices, but relatively high rents — which means that returns are high.

7. Lake City, Florida

County: Columbia

Rent for 3-bedroom: $US1,151

Unemployment rate: 6.8%

Rental Vacancy rate: 11.3%

Gross Rental Yield: 18.42%

6. Detroit - Warren - Livonia, Michigan

County: Wayne

Rent for 3-bedroom: $US1,124

Unemployment rate: 11.0%

Rental Vacancy rate: 8.9%

Gross Rental Yield:19.88%

5. Palatka, Florida

County: Putnam

Rent for 3-bedroom: $US811

Unemployment rate: 8.8%

Rental Vacancy rate: 6.3%

Gross Rental Yield: 22.63%

4. Kokomo, Indiana

County: Howard

Rent for 3-bedroom: $US888

Unemployment rate: 6.5%

Rental Vacancy rate: 6.6%

Gross Rental Yield: 24.00%

3. Duplin County, North Carolina

Liberty Hall in Kenansville, North Carolina

County: Duplin

Rent for 3-bedroom: $US793

Unemployment rate: 7.6%

Rental Vacancy rate: 8.8%

Gross Rental Yield:24.40%

2. Atlanta - Sandy Springs - Marietta, Georgia

Counties: Clayton and Spalding

Rent for 3-bedroom: $US1,187

Unemployment rate: 9.6% for Clayton county, 9.4% for Spalding county

Rental Vacancy rate: 16.9% for Clayton county, 12.3% for Spalding county

Gross Rental Yield: 26.88% for Clayton county, 20.35% for Spalding county

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