First-time buyers may be struggling with high home prices and elevated borrowing costs, but first-time investors could have better luck — if they choose the right city.
The recently released Real Estate Investment Index ranked the areas with the best investment potential for those just starting out, based on an analysis of market and regulatory factors in the 100 largest U.S. cities.
The winners? Florida and Texas metros, with Rust Belt cities making a good showing as well.
Where income potential meets landlord-friendliness: A mix of financial and legal considerations determined each city’s ranking. Monetary factors carried the most weight and included average rent prices, median sale prices, gross rental yield — the total rent collected annually compared to the property’s purchase price — and renter demand.
“Landlord-friendliness,” determined by average eviction time, security deposit limits and rent control laws, also affected the rank.
The Sun Belt rules: Among the top 20 cities most accessible to first-time investors, Florida and Texas each accounted for seven, with the Sunshine State claiming the top two spots. Port St. Lucie came in at No. 1, followed by Cape Coral. Both cities have rising populations, providing steady demand, and the state offers some of the nation’s lowest property taxes as well as ample inventory. Median home prices in the two metros fall in the mid-$300,000 range.
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Author: Amie Fisher
