IRVINE, Calif.—In which markets should borrowers be looking to buy investment properties? HomeUnion’s new 2017 National Single-Family Rental Research (NSFR) Report ranks 31 metro areas based on several factors, including investment opportunities for 2017, yields, rental demand, investment home prices and capital markets conditions.
According to HomeUnion, Atlanta topped the Opportunity Rankings list as the metro area offering the best real estate investment opportunities in 2017, followed closely by Orlando and Seattle.
“An excellent mix of rental housing supply and demand fundamentals, along with low levels of new construction and favorable entry prices, which mitigates risk for investors, were the factors we used to create our opportunity rankings,” said Steve Hovland, director of research for HomeUnion and the lead author of the 2017 NSFR.
According to HomeUnion Research Services, nationwide, the NSFR market will remain healthy in 2017, though increased competition from a wave of new apartments will slow the pace of improvement. Nonetheless, vacancy will continue to tighten on a national basis, reaching the lowest level of the current cycle, HomeUnion said.
“Strong job growth will encourage new household formation, particularly among Millennials that have been living with their parents,” added Hovland. “As most of these new households are unlikely to enter the ownership pool, this will create demand for rental properties. Additionally, higher home prices, limited inventory, debt burdens and rising interest rates will limit the number of first-time homebuyers to approximately 35% of the market, well below the long-term trend of 40%.”