Single Family Home Investments in the USA

Where are the best places to invest in the USA for rental purposes? First of all, it’s important to begin and realise that the USA has seen some massive drops on home values in the last 3 years. However, some of these places have now, in turn, taken the top spots in being ranked as the best hotspots for rental property investors.

According to a LocalMarketMonitor, a land and property data firm, Las Vegas is the best place to invest in the USA. In this location, prices have dropped by 50% on average and the city offers some of the best rental returns. The Las Vegas and general Nevada market is something we are looking into as a company and are currently in negotiations with an asset management company to broker deals to our European clients.

In second and third place, according to this LocalMarketMonitor, we have two cities in Michigan: Detroit and Warren. As most of our clients are aware, we tend to avoid the ultra-depressed areas of Detroit and the state of Michigan in general. Yes, the prices may be seriously low there and the rental yields are high, but who are you going to sell it on to? Always think about your exit strategy as the vast majority of tenants in Detroit will be section 8 tenants (those on welfare). We have a separate article on why we avoid Michigan – you can find this in the news archive.

What about the areas in the USA that we currently offer our brokerage service?

We currently offer selected projects in Orlando, which comes in at fourth. It should be noted, that we accept Orlando saw a boom of housing between 1998 to 2007, creating an unsustainable bubble. However, if you buy into key areas that will come back up again, then Orlando is a safe bet. In fifth place is Bakersfield, California and in these two cities in particular, home prices have fallen to pre-2000 levels.

Following closely behind in sixth is another place in Florida that we have focussed our efforts on: Tampa. Again, similar to Orlando, the buyer needs to be cautious about where they buy as there are a glut of condominium developments which have seen prices plummet since 2007.

The LocalMarketMonitor ranking tool takes into account the potential home-price appreciation and gross rents to analyse the performance of rental investments, specifically single-family homes or SFHs which is a great tool for us as we tend to focus on these types of homes.

As for general comments and a levelled critique on single family homes – these kind of investments carry a risk as there is scope for further price drops, especially in places like Las Vegas and Detroit where void periods sit at 12% and 19% respectively. Again, it’s key to stress that you should buy in areas that have good resilience and ability to bounce back i.e. areas within areas that will rebound and pick up quickly once the market picks up. Contact us on 020 3603 8903 to discuss your options with us and what locations we are confident in.

Source: Local Market Monitor

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