“It’s a good time to be a landlord,” Florida Realtors news sector announced recently in an article explaining how rental properties in the US offer excellent long-term investment. The short-term return might not be as high as quick sales of US property but buy-to-let investment does secure long-term wealth.
RealtyTrac has carried out research into the phenomena of investor landlords and the resulting figures paint a very rosy picture for this property investment option. According to RealtyTrac vice president Daren Blomquist, buying and renting gives the investor “the best of both worlds” because you receive annual returns in tandem with long-term property appreciation. He likens buy-to-let to a stock with dividends.
Stable investment option
Blomquist claims that buying a property in the US yields annual returns of between 6 and 9 per cent. Importantly, these returns are stable because of the current rental market situation where there’s no shortage of prospective tenants and monthly rental rates are at their highest for several years. With the current imbalance in the market where demand far exceeds supply, there’s no sign of rental rates falling.
The buy-to-let investment option is considerably more attractive than the option of flipping a property where short-term gains are higher but the market more limited. Blomquist calculates that investors can expect a return of around 15 per cent from buying a US property, refurbishing it and then selling it. But he points out that current market conditions mean there are fewer distressed homes for sale.
Buy-to-let Florida Property Popular
While RealtyTrac research doesn’t track the actual figures behind the buy-to-let segment of the US property market, it looks at the number of properties that are non-owner occupied in 35 of the largest markets across the country. These numbers give a good idea of the number of investor-landlords.
Given its buoyant property market, huge employment growth and excellent economic prospects – Florida is set to grow above the national average for the next three years – it’s no surprise to discover that the Sunshine State ranks as one of the most popular options for landlord investment. RealtyTrac reveals that several Florida counties have high percentages of non-owner-occupied homes.
In the counties of Palm Beach, Broward and Miami-Dade, property that isn’t occupied by its owner accounts for 31 per cent of the total. A figure topped by just two locations in the whole country – 33 per cent of all property in Orlando (single family homes, townhouses and condos) and 40 per cent in Las Vegas.
According to Zillow statistics, average rentals for properties in Florida have gone up by 2 per cent over the last year and by 18 per cent over the last four years. In South Florida, single-family homes rent for an average of US$1,810 a month.
Value-for-money property is increasingly harder to come by in many parts of the US, including Florida where the market is tightening. “With home prices on the rise, it’s harder to find properties that fit the criteria,” says the Florida Realtors article and recent statistics support this. In October, property in Florida registered the 47th consecutive month of house price increases and median prices rose by 12.4 per cent in the year.
Source: Florida Realtors, RealtyTrac