Florida ranks high in the listings for the best places for single family rentals in the US. The metro areas of Orlando, Jacksonville and Tampa feature across the board for opportunity, high demand and capital rate ranking. This latest research confirms the excellent potential for buy-to-let properties in Florida.
The HomeUnion Single Family Rental Research Report, released earlier this year, states that “supply and demand for rental properties nationwide will result in another solid year for investors”. The report looks at job growth, property demand, capital appreciation and general economic conditions in 30 metropolitan areas throughout the US. The resulting figures led to the classification of the best places for single family rentals in the US.
Predictions for rentals in the US in 2017
Based on the findings in the report, HomeUnion produced a series of predictions for the single family rental market in the US for this year. The company believes that vacancy levels will continue to drop throughout the year and across the nation to reach their lowest ever.
This statistic is based on the continual increase of new households, over half of which are renters. For example, in 2016, the US Census Bureau found that the number of households in the US had grown by 805,000. 434,000 of these were renters. HomeUnion forecasts a vacancy rate for single family rentals in the US of 6.4 per cent by the end of the year.
Rising property prices and low inventory levels limited first-time ownership for many American households last year. HomeUnion predicts that this scenario will continue in 2017 and bring the level of first-time buyers to just 35 per cent of the market, considerably under its historic average of 40 per cent.
As regards rises in rents, HomeUnion doesn’t believe these will happen throughout the US. However, the company does forecast higher rentals in metros in the Sun Belt, particularly in the states of Florida, Carolina and Texas. On average, they predict a rent rise for single family rentals in the US of 3.5 per cent this year.
Best opportunities for rentals in the US
To compile its Opportunity Ranking table, HomeUnion compared supply and demand as well as projected job growth in 2017. The report also studied property prices and recent (and forecast) capital appreciation.
At the top of the table was Atlanta, closely followed by Orlando. HomeUnion highlighted both metro areas as the best for single family rentals in the US because of their strong job growth, a phenomena pushing population figures up. According to the report, both Orlando and Atlanta also benefit from “an exodus of retirees trading cold-weather climates for warmer alternatives”.
Best demand for single family rentals in the US
The second metric in the HomeUnion survey looks at those metro areas with the highest demand for single family rentals. Seattle ranks at the top of the table for its strong job market and high rental rises. Orlando also features in this section as the fourth most favourable metro area for supply and demand forecasts. According to the report, “thriving hospitality and tourism sectors” are driving the rental market in Orlando.
Best rentals in the US for yields
HomeUnion also examines capital rates for rental properties in the US. To do this, the report looks at property prices, average rents for single family home rentals and their operating costs. The results show the best capital rates for rentals in the US.
Highlights in this table include metro areas in the Rust Belt – both Cleveland and Detroit rank highly – and areas that have overcome high foreclosure levels. For HomeUnion, these include Jacksonville and Tampa in Florida that have emerged “as strong markets for yield-seeking buyers” and stand in seventh and eighth places respectively.
“Florida rental properties showed consistent potential throughout 2016,” says Dies Poppeliers, Managing Director of BRIC Group. “With the state registering strong job creation, economic growth and tourism, we fully expect to see continued high yield from buy-to-let in the Sunshine State.”
BRIC Group, an investment company specialising in global real estate opportunities, offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group is also developing The Coral resort, in Northeast Brazil, a luxury beachfront resort with land and villa investment opportunities. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US.