around. Driving and walking are the most common modes of transportation, but prospective buyers and renters are also increasingly considering public transportation.

In 2018, only 30% of buyers said a new home’s proximity to public transit was “very important” or “extremely important,” according to the 2023 Zillow Consumer Housing Trends Report. But in 2023, 43% said so — the largest increase of any neighborhood characteristic. 

Thirty-seven percent of renters said living near public transportation was “very important” or “extremely important,” the highest level in the past six years. While many people may want to be close to public transit for career purposes, the benefits may extend beyond work.

“Living near public transportation is more important to today’s buyers and renters than it’s been in at least the past several years. 

Still, it’s likely not the deciding factor for many movers — more say living in a walkable neighborhood, living near leisure amenities and living near family are important to them,” Zillow senior economist Nicole Bachaud told ConsumerAffairs.

“While the importance of living near public transportation has been on an upswing for homebuyers, the importance of commute times has stayed relatively steady. That could indicate buyers are interested in public transit for more than just their trips to the office and back.”

Knowing how you’ll get around your new hometown is vital before hiring moversto take you there. To help, the ConsumerAffairs Research Team investigated and ranked the nation’s 50 largest cities to see which have the best public transit systems. The analysis is based on 2022 data from the U.S. Department of Transportation’s National Transit Database, and it takes into account how useful, safe, affordable and efficient transit services are in the nation’s top cities.

Key insights

Bigger isn’t always better. While the country’s most populous metro area, New York City, had the highest-scoring transit system, second place went to the much smaller San Francisco metro area. 

Only three of the top 10 transit systems are in the nation’s top 10 most populous cities. Good transit spans the country.

Among large cities, the top 20 for transit include locations on the Atlantic and Pacific Coasts, the South, the Mountain West, the Midwest and along the Great Lakes.

Transit is safe. The average rate of major safety events across the 50 largest U.S. cities’ transit systems is 3 per 1 million miles traveled by transit vehicles.

Transit is affordable. The average transit trip in the nation’s largest cities costs $2.56 one way, even when accounting for varying prices by distance, peak hours and monthly passes.

Major advantages of public transit

Some advantages of public transit systems include their eco-friendliness, shorter commute times and connectability. 

Transit vehicles emit far fewer greenhouse gases per passenger mile than a regular car, and you don’t have to fight traffic yourself or pay for parking at your destination.

Transit lines also usually connect, making longer trips possible, such as weekend getaways.

Personal advantages abound, too. Riding on local public transit can allow you to see diverse neighborhoods and meet other people you share the city with. Relieved from driving, you can also rest, read or otherwise relax during the journey.

Artificial intelligence can also make public transit systems more efficient and save riders time by analyzing different routes and schedules to get you to your destination faster and without as much of a hassle.

A 2020 report from the International Association of Public Transport found AI offers the potential to adjust transit services in real time, responding to heavy traffic, heavy ridership and sudden emergencies. 

The report found that AI systems can also help users plan journeys that combine multiple stops and interconnecting services and adapt fares to meet specific goals for both revenue and equity. They can also save agencies money by optimizing fuel efficiency and maintenance services.

Since that report came out, the U.S. federal government has spent millions of dollars helping transit agencies around the country develop AI systems that aim to improve service, reliability and cost in transit systems. 

The starting point for many of the nation’s most populous cities is already quite good — but there is still much room for improvement everywhere.

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U.S. public transit systems, ranked

In this study, we examined a range of data points from the U.S. Department of Transportation’s National Transit Database and calculated a score for each city, with a maximum number of 100 points achievable. You can read the full methodology below.

Here’s how the cities stacked up:

1. New York, New York

• Annual public transit trips per metro area resident: 144.2
• Share of stations ADA-compliant: 51.4%
• Safety score (combining fatalities and serious injuries): 13.07 out of 20
• Average fare revenue per trip: $1.75

The nation’s most populous metro area is served by a large number of transit agencies, with trains and buses covering the five boroughs of New York City itself, as well as areas well into New Jersey, Connecticut and downstate New York. While the average fare revenue is higher than most, it’s still cheaper per trip than in Pittsburgh, Pennsylvania, and Buffalo, New York.

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2. San Francisco, California

• Annual public transit trips per metro area resident: 53.6
• Share of stations ADA-compliant: 97%
• Safety score (combining fatalities and serious injuries): 13.91 out of 20
• Average fare revenue per one-way trip: $1.63

With the third-worst commuter traffic in the nation, San Francisco residents might be desperate for other ways to get around. Fortunately, Bay Area Rapid Transit connects the city with its suburbs, and the Muni bus and train system – including the city’s famous cable cars – gets people around the city itself. There are also free shuttles to get people to and from public parks.

3. Los Angeles, California

• Annual public transit trips per metro area resident: 29
• Share of stations ADA-compliant: 100%
• Safety score (combining fatalities and serious injuries): 16.48 out of 20
• Average fare revenue per one-way trip: 49 cents

Los Angeles, well known as a sprawling car-oriented metropolis, has a transit system that doesn’t get as much use per capita as other cities’ services. However, it’s one of the safest and most affordable transit systems nationwide.

4. Richmond, Virginia

• Annual public transit trips per metro area resident: 8.5
• Share of stations ADA-compliant: 100%
• Safety score (combining fatalities and serious injuries): 18.27 out of 20
• Average fare revenue per one-way trip: 24 cents

With free local bus fares across the city, including high-speed buses with some dedicated lanes that provide service every 10 minutes on weekdays and every 15 minutes on weekends, Richmond’s public transit system is safer and more efficient than many other large cities’ services. Unfortunately, it is used less frequently than any other system mentioned in our top 10 list.

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5. San Diego, California

• Annual public transit trips per metro area resident: 21
• Share of stations ADA-compliant: 100%
• Safety score (combining fatalities and serious injuries): 14.74 out of 20
• Average fare revenue per one-way trip: $1.10
• A new safety initiative, expanded service and upcoming investments in new vehicles, including electric buses, are drawing riders to San Diego’s trolleys and buses, which serve the downtown area and the surrounding communities.
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• 6. San Antonio, Texas
• Annual public transit trips per metro area resident: 12.6
• Share of stations ADA-compliant: 100%
• Safety score (combining fatalities and serious injuries): 18.44 out of 20
• Average fare revenue per one-way trip: 58 cents
• San Antonio’s bus service spans the city and is set to expand in the coming years. The agency that runs it, VIA Metropolitan Transit, is also working to make its service schedules and maps more comprehensible to prospective users. The city is also considering new zoning rules that would make denser housing along high-capacity bus lines easier for developers to build.
• 7. Boston, Massachusetts
• Annual public transit trips per metro area resident: 47.5
• Share of stations ADA-compliant: 78%
• Safety score (combining fatalities and serious injuries): 14.57 out of 20
• Average fare revenue per one-way trip: $1.63
• In Boston, a city well known for confounding even local drivers with one-way streets and hairpin turns, it’s tempting to let someone else handle navigation. Even with a relatively expensive average fare and incomplete ADA compliance at stations, the city’s MBTA trains and buses are relied on more heavily than transit vehicles in other large cities.

8. Seattle, Washington

• Annual public transit trips per metro area resident: 36.7
• Share of stations ADA-compliant: 99.1%
• Safety score (combining fatalities and serious injuries): 14.52 out of 20
• Average fare revenue per one-way trip: $1.57

Seattle’s public transit system, which includes buses, trains, and ferries, links its suburbs, downtown area and nearby islands. In 2024, the city is asking voters to raise their taxes to pay for a 20-year transportation plan that includes pothole repair and expanded transit services.

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9. Washington, D.C.

• Annual public transit trips per metro area resident: 36.7
• Share of stations ADA-compliant: 100%
• Safety score (combining fatalities and serious injuries): 15.41 out of 20
• Average fare revenue per one-way trip: $1.29

The D.C. area’s roads are so famously congested that people joke there is no rush hour at all — except all the time. Fortunately, the Metro system encompasses trains, buses and subways run by city officials and state and local agencies in neighboring Maryland and Virginia.

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10. Salt Lake City, Utah

• Annual public transit trips per metro area resident: 26.7
• Share of stations ADA-compliant: 100%
• Safety score (combining fatalities and serious injuries): 11.83 out of 20
• Average fare revenue per one-way trip: $1.07

Bus and rail lines crisscross the city and the surrounding county. The city’s plans for transit expansion call for additional services by 2030 and are being used to tempt Olympic officials to consider it as a location for the 2034 Winter Games.

Why you should consider moving to a city with a good public transit system

When you’re looking for your next place to live — whether near where you already call home or somewhere farther afield — it’s worth noting how close transit services are and how well they’ll get you where you want to go.

According to Nicholas Julian, the senior program manager for land use at the National Association of Home Builders, builders and developers are noticing this interest. He observed that the move toward “transit-oriented development” has been decades in the making, with governments and private companies working to build housing along existing transit routes to reduce traffic and pollution.

 He noted that many cities are also rethinking minimum parking requirements to reflect residents’ desire to drive less and discourage additional cars from clogging the roads.

Although Julian works most directly with people involved in suburban development projects not designed explicitly around transit, he notes that “any type of access to public transit …  will be advertised” to prospective buyers or renters.

He pointed out that some developers are stepping forward to reduce driving while improving people’s ability to get the services and experiences they want. For example, Culdesac Tempe, in Arizona, is a development that actively discourages residents from owning cars while providing free transit, reduced ride-sharing costs and free e-bikes to at least some residents.

“If you can build a car-free community in Tempe, it’s probably possible just about anywhere,” Julian said. That may also mean you can live a car-free or car-light lifestyle in just about any other city, too.

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Methodology

The ConsumerAffairs Research Team conducted a comprehensive analysis of the public transit systems in the 50 most populous metropolitan areas across the United States and scored each on a point scale from zero to 100. To determine which cities had the best public transportation, we looked at the following metrics:

• Usefulness to riders: We defined how useful a transit system was to its city’s residents based on three factors:
  • First, we calculated how many independent passenger trips the population took in 2022 in relation to the metro area’s population. This information was based on the National Transit Database annual metrics for 2022. (25 possible points)
  • Second, we calculated how far passengers traveled in 2022 per resident in the metro area. (20 possible points)
  • Third, we looked at how easy the main public transit system was to access for people with physical disabilities. We used the 2022 National Transit Database information on transit stations to calculate the percentage of all ADA-compliant systems. (10 possible points)
• Safety: Based on the National Transit Database’s Safety & Security Major Event Time Series data for 2022, we calculated the number of major events, including collisions and derailments, per vehicle revenue mile in 2022. (10 possible points)
  • We also calculated the rate of fatalities and injuries in major events per 2022 vehicle revenue mile. (5 possible points each)
• Affordability: We looked at the fare revenue per unlinked passenger trip based on the National Transit Database annual metrics for 2022. We compared that with the median household income in 2022 for that metro area according to the U.S. Census Bureau’s American Community Survey. (15 possible points)
• Efficiency: We determined the average operating cost per passenger mile based on the National Transit Database annual metrics for 2022. (10 possible points)

So, you want to find the best rental property deal and invest some hard-earned money.

This is a common query from my readers.

What about the potential to make some serious shekels by becoming the mortgage bank instead of the landlord? Where else besides private mortgages or so-called “hard-money lending” can you find a 10% rate of return in a term of three years?

Hard-money lending is a close cousin to more direct rental investing. It’s worth considering. Why? Certain property owners will pay handsomely because, for one reason or another, they can’t qualify for cheaper institutional financing from commercial banks, Fannie, Freddie and the like.

Typically a hard money loan is arranged and funded for one- to four-unit complexes, small apartment buildings and retail strip malls. An appraisal may be required, and title insurance will always be required to protect all concerned.

“The going market rate is around 10% to 11%,” said Ken Thayer, president of Newport Beach-based Residential First Capital. “Up to 10 people can invest in one fractionalized note. Ten people each put up $100,000 on a $1 million note as an example.”

Thayer, who’s been in the lending business since 1986, said 90% of his deals are for one to four units. Half the deals are seconds with an average loan amount of $300,000 or $600,000 for first mortgages. He typically stays under $3.5 million for any deal.

Private money mortgages, called a deed of trust in California, can be in first, second or third position as a lien against real property.

Thayer’s investment customers pay 1.25% of the balance to service the notes. Servicing fees such as Thayer’s are all over the map. You can find servicers charging less or even a lot less. And, of course, some servicers charge more than 1.25%. For example, if the note to the property owner is 11% and the servicer charges 1%, then the investor would receive a net 10% return excluding ordinary income taxes.

Let’s say five investors are investing $200,000 in a $1 million hard-money loan. If the note rate is 10% and Thayer charges each investor 1.25% to service, each investor would earn 8.75%. Or look at it this way: $200,000 x 8.75% =  $17,500 divided by 12 months $1,458.33 to each investor each month as an interest-only payment.

Even though Thayer services $110 million in hard money loans, he thinks real estate rentals are still a better deal. “I would have made more money sticking it out in real estate,” he told me.

Thayer makes a good point. California homes, even with prices softening, are still riding 25-35% appreciation, which for long-term investors tops most hard-money profits.

My advice: Your best protection against the borrower who is willing to pay you a lot more because he or she can’t get a bank loan is the property’s remaining equity. If there is 50% remaining equity, the investor is relatively safe even if the borrower should default and property values continue to soften. Nobody wants to foreclose, but that offers a measure of protection.

In the current market, I think you’d be better off investing in hard-money loans than an actual rental property for the following reasons:

1) Real estate values are falling. (Nobody wants to catch a falling knife)

2) Carrying costs (mortgage payment of principal, interest, taxes, insurance and any HOA) are currently high.

3) Utility costs are ginormous, cutting into profit

4) California rent forbearances still lurk in these post-COVID days

5) There is talk of national rent “protections”

Back to the money. What about the staying power of these lofty 10% returns on hard-money investing? Can you get an even higher yield if we see more inflation?

Conventional mortgage rates hit an all-time low of 2.65% in January 2021, according to Freddie Mac. Even though rates have much improved over the past few months they are still very high at 6.09% as of Feb. 2.

The prime rate hit a low of 3.25% in March 2020. (December 2008 was the last time the prime rate was this low). On Feb. 1, Wall Street’s prime rate climbed to 7.75%. It hasn’t been that high since September 2007. And it’s all but certain short-term borrowing costs are going to rise more in the near term.

The typical private money loan is two to three years with a balloon payment owed by the property owner at the end, according to attorney Dennis Doss of Doss Law, an expert on private money mortgages.

As Thayer explained, Wall Street money swooped in during the COVID days, bringing cheaper alternatives for borrowers needing hard money, maybe in the 9% range. But that train has left the station. Rates have moved back up.

So, how much more can you get?

“There is no maximum rate (statutory maximum) for brokered-arranged loans,” said Doss. “The rate is market dependent.”

So why not just stick with buying a rental property? Private mortgages require little to no effort on the investor’s part while rental properties require a ton of effort to manage.

How do you know who to invest your money with? Scammers are everywhere.

“For consumers trying to ensure they are working with a good private money broker, we’d suggest they check the broker’s license, talk to references, read online reviews, and get information from Better Business Bureau, chamber of commerce and other community groups,” said Rick Lopes, assistant commissioner with the California Department of Real Estate.

Doss tells investors they should figure out how aggressive the private money broker is when it comes to finding and evaluating properties on which to issue loans. Ask for a copy of the broker’s most recent business activities reports. Check for their borrowers’ delinquency rates, which ideally “should be 5% to 7% or less (60-90 days late or more),” he said.

California law requires a brokerage to review any investor’s suitability to invest in the trust deed based on a questionnaire (California Department of Real Estate form RE870). It looks at the investors’ net worth, income and investment background. The investment does not exceed 10% of the investors’ net worth minus home, furnishings, autos or 10% of their income.

Freddie Mac rate news

The 30-year fixed rate averaged 6.09%, 4 basis points lower than last week. The 15-year fixed rate averaged 5.14%, 3 basis points lower than last week.

The Mortgage Bankers Association reported a 9% mortgage application decrease from last week.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $726,200 loan, last year’s payment was $1,115 less than this week’s payment of $4,396.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 4.875%, a 15-year conventional at 4.5%, a 30-year conventional at 5.25%, a 15-year conventional high balance at 4.99% ($726,201 to $1,089,300), a 30-year high balance conventional at 5.625% and a jumbo 30-year fixed at 6.125%.

Note: The 30-year FHA conforming loan is limited to loans of $644,000 in the Inland Empire and $726,200 in LA and Orange counties.

Eye catcher loan program of the week: A 30-year VA fixed rate at 4.875% with 1 point cost.

Renters looking for new digs may be in luck. Rents have fallen for the fifth month in a row thanks to an uptick in home and mortgage prices which continue to bend the housing market in favor of tenants.  

That’s according to Realtor.com’s September Rental Report, which shows median rents for 0-2 bedroom apartments fell by as much as .7% year-over-year. The median asking rent across the 50 largest metropolitan areas in the U.S. hit $1,747 in September, which is $5 less than it was in August, and $29 less than its peak in July 2022. 

“September marked the fifth month with year-over-year declines in median asking rents,” according to the report. “An important factor contributing to the softness in the rental market is the increase of multi-family construction which keeps working its way through the pipeline to boost the supply.”

Rents fell the most in the Austin, Texas (-7.3%); Dallas (-6.2%) and Orlando, Forida (-5.4%), despite recent growth in those areas, particularly Austin, as emerging tech hubs

Demand remains strong

In September, the number of multi-family buildings with five or more units completed was 445,000, a 10.1% increase from the previous month and a 15% increase from the year prior, according to Rental.com. Meanwhile, 82,310 apartments were completed in buildings featuring five or more units during the first quarter of 2023, the Census Survey of Market Absorption of New Multifamily Units (SOMA) shows. 

Rental.com’s report also reveals that recently completed housing units have been quickly absorbed into the housing market, signaling that demand for affordable rentals remains strong. Within the initial three months following completion, 61% of newly finished apartments had renters. 

Not all cities saw rental prices fall. Here are the 24 metro areas where median rent are lower than they were a year ago, according to Realtor.com’s data.

Metro area	Median Rent (0-2 Bedrooms)	YOY (0-2 Bedrooms)
Austin-Round Rock, TX	$1,638	-7.3%
Dallas-Fort Worth-Arlington, TX	$1,530	-6.2%
Orlando-Kissimmee-Sanford, FL	$1,710	-5.4%
Portland-Vancouver-Hillsboro, OR-WA	$1,681	-5.4%
Phoenix-Mesa-Scottsdale, AZ	$1,563	-5.2%
Atlanta-Sandy Springs-Roswell, GA	$1,659	-4.9%
San Francisco-Oakland-Hayward, CA	$2,925	-4.8%
Raleigh, NC	$1,562	-4.3%
Seattle-Tacoma-Bellevue, WA	$2,058	-3.9%
Tampa-St. Petersburg-Clearwater, FL	$1,720	-3.9%
Los Angeles-Long Beach-Anaheim, CA	$2,887	-3.4%
Las Vegas-Henderson-Paradise, NV	$1,509	-3.3%
Memphis, TN-MS-AR	$1,293	-3.3%
Sacramento–Roseville–Arden-Arcade, CA	$1,864	-3.3%
Miami-Fort Lauderdale-West Palm Beach, FL	$2,486	-2.4%
San Antonio-New Braunfels, TX	$1,279	-2.4%
Charlotte-Concord-Gastonia, NC-SC	$1,604	-2.2%
San Diego-Carlsbad, CA	$2,891	-2.0%
Riverside-San Bernardino-Ontario, CA	$2,316	-1.6%
Denver-Aurora-Lakewood, CO	$1,957	-1.0%
Chicago-Naperville-Elgin, IL-IN-WI	$1,801	-0.6%
San Jose-Sunnyvale-Santa Clara, CA	$3,305	-0.6%
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	$1,790	-0.4%
Nashville-Davidson–Murfreesboro–Franklin, TN	$1,649	-0.2%

https://www.cbsnews.com/news/rents-falling-cheaper-18-cities-pay-less-relator-com-september-rental-report/

If you’re considering buying a rental property, familiarizing yourself with the best rental markets in the country could go a long way in preparing you to invest in your first buy-and-hold asset. Aside from being some of the best cities to invest in real estate, today’s best places to buy rental property can teach us a lot about how to invest in specific locations. The location you choose to invest in will ultimately determine the viability and success of any assets you acquire. After all, those who know how to read and interpret market indicators will know where the best rental markets reside. Keep reading to learn where the best places to invest in real estate long term are, and why investors should be excited.

Best Rental Markets In 2023

Rent growth in 2022 was attributed to supply and demand constraints in the housing sector. Historically low interest rates, pent-up demand, and years of government stimuli created a competitive market—the likes of which had never been seen before. At the same time, inventory was unable to keep up with the pace of buying activity; there simply weren’t enough homes to keep up with demand. As a result, even those who wanted to buy were relegated to the renter pool in 2022, causing rents to spike. In response to higher home prices and rental rates, many households used the work-from-home trends created by the pandemic to relocate to the Sunbelt.

As we get closer to turning the page on 2022, however, the best rental markets are starting to shift to the Midwest. Over the latter part of 2022, the Midwest has seen some of the fastest rental rate growth in the country, and 2023 doesn’t appear as if it will put an end to the momentum. The convergence of record rent increases and inflation is forcing more people to move back in with families or roommates, or even delay renting altogether.

The shift in sentiment has also changed the best places to buy a rental property in 2023. Instead of focusing on the Midwest, as investors have done throughout 2022, the best rental markets in 2023 are looking more and more like the following:

• Chicago, Illinois
• Cincinnati, Ohio
• Columbus, Ohio
• Grand Rapids, Michigan
• Louisville, Kentucky
• New York, New York
• Phoenix, Arizona
• Spokane, Washington
• Raleigh, North Carolina
• San Diego, California

Chicago, Illinois

The Chicago real estate market looks well positioned to be one of the best rental markets in 2023. If for no other reason, Chicago represents the third-largest metropolitan area in the United States. With more than 50.0% of the city’s population already locked into a rental agreement, buying a rental property in Chicago is just as much of a volume play as it is a smart decision. The number of potential renters in a city with relatively high private sector employment bodes well for investors looking to fill units. Additionally, Chicago could see its number of renters grow over the course of 2023. With a mere 16.8 weeks of supply in the housing sector, there aren’t nearly enough homes to keep up with buyers. Those who can’t buy will be forced to rent and drive up demand in a city that already has peak competition. Rents have already risen about 7.3% over the last 12 months. If interest rates continue to spike and home affordability continues to crumble, there’s no reason to think rents won’t march even higher in 2023.

Cincinnati, Ohio

Owning a rental property in the Cincinnati real estate market is growing more attractive with each passing day. With local rents growing about 6.0% in the last six months alone, Cincinnati has one of the fastest metro-level rent growth rates in the country. The rise in rental rates appears to be attributed to the city’s relative affordability. With that in mind, more people are looking to Cincinnati in an attempt to escape today’s high prices. With a median sales price somewhere in the neighborhood of $230,000, Cincinnati real estate is more affordable than the national average and, therefore, one of the last bastions of affordable housing. The added action, however, is straining the city’s 11.4 weeks of supply. Not unlike just about everywhere else, there aren’t enough homes to satiate buyers. As a result, local rents are expected to increase significantly as buyers are turned away from purchasing and towards renting. 

Columbus, Ohio

One of the best places to buy a rental property in 2023 is shaping up to be the Columbus real estate marketin Ohio. Similar to Cincinnati, Columbus has seen a lot of extra attention over the course of 2022. At $246,515, the median home value in Columbus is well below the national average. Due to the city’s relative affordability, more people are looking to call it home. However, Columbus only has about 13.1 weeks of inventory; not nearly enough to keep up with demand. The imbalance between competition and inventory has created more demand for rentals, increasing rents as much as 6.0% over the last six months. Looking into 2023, demand for real estate in Columbus will increase as more people look to escape less affordable markets. When supply fails to keep up with demand, more renters will enable landlords to increase rental rates, making Columbus one of the best rental markets in 2023.

Grand Rapids, Michigan

While rents in the Grand Rapids real estate market haven’t increased at quite the same pace as the previously mentioned cities, 2023 is starting to look like a great year for passive income investors. For starters, landlords will see plenty of demand thanks to the city’s distinct lack of inventory. With 7.0 weeks of supply, inventory is nowhere near capable of keeping up with demand. Subsequently, Grand Rapids is expected to see a steady influx of net migration due to the city’s relative affordability. More households will be forced to rent, regardless of whether they can afford to buy. Discrepancies in supply and demand have already resulted in a 5.4% increase in rents over the last year, and there’s nothing to suggest the trend won’t continue. As a result, investors will see plenty of demand for their rental units, giving them the ability to increase asking prices accordingly.

Louisville, Kentucky

While not technically part of the Midwest, the Louisville real estate market is benefiting from the same migration trends as the rest of the best rental markets on this list. Most notably, renters are choosing to call Louisville home because it represents a more affordable real estate market. The median home value in Kentucky is about $125,000 less than the national average, serving as an affordable alternative for anyone who was granted work-from-home privileges over the course of the pandemic. The added attention on the Louisville market will pose a significant challenge for local inventory levels. With a little more than two months of inventory, demand greatly outweighs supply. The lack of inventory has already increased rents by 8.1% over the last 12 months. Therefore, it’s reasonable to assume that more people moving to Louisville in search of affordable living situations will ironically increase rental rates.

New York, New York

Few cities across the country have proven to be a better market to be a landlord in than New York. In the last six months, metro-level rent growth increased upwards of 5.0%, trailing behind only Columbus and Cincinnati. However, unlike its Ohio counterparts, New York hasn’t seen an influx of demand because of affordability. Instead, the New York real estate market is finally starting to get its legs underneath it. With what looks like the worst of the pandemic in the rearview mirror, New York is starting to fire on all cylinders. People are going back to the office, and landlords are seeing more demand for their units. New York landlords have already been able to increase rents at an attractive rate, and current trends suggest they will continue to be able to do so—at least for the foreseeable future. 

Phoenix, Arizona

Only a handful of metropolitan areas have seen their rents increase as much as the Phoenix real estate market over the last three years. Since the beginning of the pandemic, in fact, rents in Phoenix have increased by about 32.0%. Only seven other cities with a population greater than one million saw rents increase at a faster rate than Phoenix since the first quarter of 2020. The increase was directly correlated to the market’s relative affordability and households’ inclination towards warmer weather during the pandemic. Rent increases have cooled off in recent months, but Phoenix remains a destination for both older generations on the brink of retirement and up-and-coming tech industry employees. Demand from several generations of buyers and renters will make Phoenix one of the best rental markets in 2023.

Spokane, Washington

While separated by an entire state, the Spokane real estate market is benefiting from its more expensive neighbors to the West: Seattle and Portland. Both Portland and Seattle have seen exorbitantly expensive home values lead to a mass exodus. In search of more affordable living arrangements, many households have set their sights on Spokane. With a population that barely eclipses 200,000 people, Spokane is a relatively small city receiving a lot of attention. Demand for housing has already increased home values 12.6% over the last year. Additionally, Spokane’s 11.9 week of supply can’t keep up with the net migration. As a result, the rental market has become the beneficiary of an influx of demand. Spokane real estate investors with units for rent will most likely be able to avoid vacancies with ease and increase rental rates in 2023, making it one of the best rental markets to invest in.

Raleigh, North Carolina

The Raleigh real estate market was a beneficiary of the new migration patterns created by the pandemic. Local home values have increased about 56.3% since COVID-19 was officially declared a global emergency. In that time, rents have increased a slightly more modest (but nonetheless impressive) 32.9%. As more people chose to call Raleigh home, landlords and sellers were able to increase their prices at a historic pace. That said, residents haven’t chosen to flee Raleigh as prices rise. If anything, more people are looking to call Raleigh home in 2023, which suggests it may be one of the best rental markets in 2023.

San Diego, California

Many of the hottest real estate markets in 2022 were located in the Sun Belt. As more people were granted permission to work from home during the pandemic, many households chose to relocate to warmer locations. The San Diego real estate market, in particular, saw an incredible influx of demand when buyers and renters prioritized cities with warmer weather. The resulting demand increased rents and home values almost exponentially over the last three years. Landlords have been able to increase rents as much as 5.0% in the last six months alone. That said, higher home values and rents haven’t scared away potential buyers and renters; if anything, demand remains largely intact. As a result, local landlords will find that they can simultaneously lower the risk of vacancies and increase rents in 2023.

Top Factors That Affect A Rental Property Investment

There are countless factors that play into a location’s rental viability. The sheer number of variables that have even the slightest impact on an area’s rental property performance is staggering. That said, not all indicators are created equal; there are some factors that affect a rental property investment inherently more than others, not the least of which include:

• Location
• Economy
• Vacancies & Listings
• Future Development

Location

First and foremost, the golden rule of real estate investing is still alive and well: location, location, location. Investing in a rental property with at least some success is always contingent on the area in which it is located. The location of the respective property will determine everything else I’ll discuss henceforth.

Before considering a subject property, you need to pick a location that facilitates a healthy rental market. Specifically, pay special consideration to the economy’s health, demand, job opportunities, new home construction, unemployment rates, household income, affordability, and anything else that could potentially influence a renter’s decision to live in the area. Even the best rental property in a poor location doesn’t stand a chance when all is said and done. You need to invest in an area that people want to call home and where demand will persist for the foreseeable future.

Economy

The local economy will play an integral role in determining the best places to buy rental property. Here’s a list of some of the most important economic factors you’ll need to consider when looking at the location in which a rental property is situated:

• The number of sales of existing homes
• The prices of existing homes
• The volume of new construction
• The local economy
• Population trends
• Unemployment rates
• Job growth
• Median household incomes
• Affordability

While this list is not exhaustive, each of these indicators will play an essential part in determining whether or not an area is worth investing in. Positive trends in each would likely suggest the location is ready to be invested in, but economic indicators are not mutually exclusive. Darren Nix, Founder of Steadily Landlord Insurance, adds that “investors should watch for new home costs. When the costs start to decrease, there will be less demand for existing homes and rentals”. While it’s better to have everything working in an area’s favor, a rental market can thrive with just a few of these factors on its side.

Vacancies & Listings

Mind due diligence and pay close attention to the ratio of vacancies relative to the number of listings in a particular area. An unusually high number of listings, for example, could represent one of two scenarios: either the neighborhood is currently in the middle of a seasonal cycle, or it is trending downwards. It is in your best interest to discern what the listing ratio in a particular area means for an impending investment.

Take note of the area’s vacancy rate, too. At the very least, vacancy rates will give you an idea of what sort of demand to expect. Low vacancy rates could be a good sign, as demand appears intact and active. High vacancy rates, however, could suggest poor conditions. Additionally, lower demand could force landlords to lower rates to attract tenants, not unlike yourself.

Future Development

Areas with future development projects in the pipeline are typically representative of a healthy market. Most likely, projects have broken ground because the area has shown promise, which bodes well for rental property investors. Conversely, a distinct lack of development suggests there is reason to avoid the area. Therefore, you’ll want to contact the local municipal planning department to gather information on all the new projects currently underway or will be sometime soon.

Summary

Finding the best places to buy rental property, or at the very least the best market near you, is essential whether you are purchasing your first or your fourth buy and hold property. Luckily, several indicators can help you choose an optimal location. These factors range from local economic markers to average vacancy rates and population trends. A great place to start is always looking at the year’s best rental markets. Although, these cities are just the beginning. Pay attention to the factors defining these emerging real estate markets and allow them to guide your search for the best location for your investment.

U.S. renters looking to catch a break on rent might be in luck, according to data from Realtor.com.

Out of the 50 major markets across the country, 10 metro areas are offering median rents under $1,300. Most of those discounts can be seen in the Midwest, South, or Northeast while the Western region features none of the lowest-cost metro areas.

Here are the least expensive markets, according to Realtor.com:

1. Oklahoma City, Okla. – $982

2. Louisville, Kentucky. – $1,167

3. Birmingham, Alabama – $1,178

4. Rochester, N.Y. – $1,235

5. Columbus, Ohio – $1,242

6. Indianapolis, Indiana – $1,266

7. Memphis, Tennessee – $1,274

8. St. Louis, Mississippi – $1,279

9. Cleveland, Ohio – $1,290

10. Kansas City, Mo./Kan. – $1,298

https://flo.uri.sh/visualisation/12852923/embed?auto=1

Oklahoma City is the only metro where rent is below $1,000 a month, the report found, with the median monthly rent coming in at $982.

“With high rents across the country, places that offer relative affordability tend to be in high demand, which means more competition and that these lower prices might not last,’ said Realtor.com chief economist Danielle Hale, in a press release.

“Many of these metros have fewer available rental homes than previous months, and fewer apartments to choose from means prices are likely to go up,” Hale added.

The report noted markets including Indianapolis, Birmingham, Columbus, Kansas City, Cleveland, and Rochester all saw year-over-year rents rise at a faster pace in January as renters responded to these low prices.

Low cost rental markets are also seeing vacancies come in, with the average rental vacancy rate hitting 7.6% across the 10 lowest-cost metros during the fourth quarter. This compares to a vacancy rate of 9.7% in the same quarter five years ago.

Nationally, however, rents continued to cool rising just 2.9% over last year in January, the smallest increase in 22 months.

A report from RealPage published earlier this month showed retention among renters has dropped this year as more supply hits the market and renewals slow.

“Unlike in 2021 and 2022, renters facing lease renewals are seeing more attractively priced alternatives,” RealPage chief economist Ryan Parsons wrote in the report. “That encourages relocations.”

April Rental Report: Sun Belt Metros Drive Sustained Growth in Nationwide Rents

MAY 19, 2022

April Highlights

• Rent has reached yet another high ($1,827) in Realtor.com data history, as growth continues nationwide at a pace in line with the last four months (+16.7%).
• Studio units continue to see rents increase at a faster rate than larger units, reversing the pattern from last year, particularly in the largest metros like New York City (29.1%), Los Angeles (23.2%), and Chicago (21.5%).
• Rent increases are most pronounced in Sun Belt metros, especially ones where housing demand from outsiders is growing faster than the supply of rental units built in recent years.

Nationwide Rents Continue Rapid Growth, but Pace Has Leveled Off 

The median rent in the 50 largest US metropolitan areas reached a new record high in April: $1,827. Rent has been steadily increasing since January 2021, following the general trend in housing prices and rebounding from a dip in the first year of the pandemic. The rental supply has been strained in recent months, as evidenced by the national rental vacancy rate holding below 6% in each of the last three quarters. Landlords with fewer available units are able to charge higher rents, and at the same time, for-sale home prices continue to climb. Today’s renters are left with few options but to pay these rising rents. 

Figure 1: Year-over-Year Rent Trend

One possible signal of relief from this surge can be found by tracking year-over-year rent growth. April’s rents were up 16.7% from April 2021. This marks the third consecutive month in which year-over-year rent growth has slowed, albeit modestly, from the 17.1% peak this January. Still, this level of rent increase is severe. If annual rent growth were to remain around 17% through the summer, the national median rent would eclipse $2,000 this August.

Studio Rents are Growing the Fastest

Studio unit rents increased at the fastest pace again this month, growing 17.2% from April 2021 compared to 15.9% for 2-bedroom units and 15.6% for 1-bedroom units. Studios have seen the most year-over-year rent growth every month so far this year, rebounding later than larger rentals from the price decreases in late 2021 and early 2021. 1- and 2-bedroom rents both decreased in year-over-year growth from March into April, driving the general slowdown. Studio apartments are less costly and generally attract renters with more flexible living arrangements, so they were more easily vacated early in the pandemic and are now in higher demand for those looking to move into their own place or to return to major city centers. Studio rents in New York City (29.1%), Los Angeles (23.2%), and Chicago (21.5%) all grew at a faster year-over-year rate than the national average.

Table 1: National Rents by Unit Size

Unit Size	Median Rent	Rent YoY	Rent Change – 2 years
Overall	$1,827	16.7%	21.0%
Studio	$1,499	17.2%	15.3%
1-bed	$1,675	15.6%	19.7%
2-bed	$2,552	15.9%	23.7%

Figure 2: National Rent by Unit Size Trend

Rent Growth Concentrated in Sun Belt

Leading the charge in nationwide rents are three Florida metros. Rent in Miami was up 51.6% from April of last year. Orlando (32.9%) and Tampa (27.8%) followed close behind. Recent analysis of cross-market search demand has shown that homebuyers are increasingly interested in relocating to the Sun Belt, and this migration trend has made its way into the rental market as well. 

Along with the top three rent growth metros in Florida, southern and southwestern cities like San Diego (25.6%), Las Vegas (24.8%), Austin (24.7%), Nashville (24.1%), Raleigh (23.9%) and Jacksonville (23.3%) are among the top ten markets where rent has grown the fastest year-over-year. Conversely, the chillier climates of Pittsburgh (4.2%), Detroit (4.5%), and Minneapolis (5.5%) have contributed to these metro areas landing in the bottom three for rent growth. In the case of Minneapolis, a supply-side factor is also in play, as the growth in the number of units permitted for construction in building projects of five units or more has far outpaced the national average over the past four years. Meanwhile, Miami has trailed the national growth in new multifamily construction, and the lack of housing options for new arrivals to the area has added fuel to the rent growth fire.

___________________________________________________________________________

Rental Data – 50 Largest Metropolitan Areas – April 2022

Metro	Overall Median Rent	Overall Rent YY	Studio Median Rent	Studio Rent YY	1-br Median Rent	1-br Rent YY	2-br Median Rent	2-br Rent YY
Atlanta-Sandy Springs-Roswell, GA	$1,829	16.7%	$1,665	17.9%	$1,700	17.4%	$2,035	17.7%
Austin-Round Rock, TX	$1,800	24.7%	$1,450	25.0%	$1,652	26.7%	$1,951	18.5%
Baltimore-Columbia-Towson, MD	$1,800	12.5%	$1,485	12.5%	$1,701	12.1%	$1,900	11.0%
Birmingham-Hoover, AL	$1,189	7.8%	$1,073	11.7%	$1,120	7.2%	$1,283	8.3%
Boston-Cambridge-Newton, MA-NH	$2,825	22.7%	$2,400	27.4%	$2,600	18.3%	$3,190	23.9%
Buffalo-Cheektowaga-Niagara Falls, NY	$1,290	7.5%	$1,125	2.7%	$1,125	3.0%	$1,445	7.8%
Charlotte-Concord-Gastonia, NC-SC	$1,675	19.5%	$1,563	21.8%	$1,588	21.3%	$1,840	17.3%
Chicago-Naperville-Elgin, IL-IN-WI	$1,923	13.5%	$1,580	21.5%	$1,880	13.9%	$2,160	9.6%
Cincinnati, OH-KY-IN	$1,416	8.9%	$1,200	13.2%	$1,360	8.8%	$1,576	8.4%
Cleveland-Elyria, OH	$1,409	10.7%	$950	4.4%	$1,319	6.2%	$1,540	14.1%
Columbus, OH	$1,275	11.1%	$1,095	10.1%	$1,200	11.9%	$1,390	9.4%
Dallas-Fort Worth-Arlington, TX	$1,655	21.3%	$1,375	18.5%	$1,508	22.4%	$1,918	20.3%
Denver-Aurora-Lakewood, CO	$1,970	15.3%	$1,600	14.7%	$1,848	16.0%	$2,331	16.3%
Detroit-Warren-Dearborn, MI	$1,385	4.5%	$1,074	7.9%	$1,165	6.4%	$1,545	4.6%
Hartford-West Hartford-East Hartford, CT	$1,626	7.5%	$1,497	32.5%	$1,440	2.9%	$1,955	11.7%
Houston-The Woodlands-Sugar Land, TX	$1,435	13.1%	$1,344	11.6%	$1,310	13.4%	$1,609	12.7%
Indianapolis-Carmel-Anderson, IN	$1,237	8.9%	$1,050	8.4%	$1,130	8.2%	$1,374	10.9%
Jacksonville, FL	$1,600	23.3%	$1,430	42.3%	$1,484	20.8%	$1,757	24.4%
Kansas City, MO-KS	$1,233	10.6%	$1,014	9.1%	$1,115	13.0%	$1,465	11.3%
Las Vegas-Henderson-Paradise, NV	$1,649	24.8%	$1,315	13.4%	$1,519	25.5%	$1,750	22.3%
Los Angeles-Long Beach-Anaheim, CA	$3,016	20.9%	$2,279	23.2%	$2,767	23.9%	$3,445	18.2%
Louisville/Jefferson County, KY-IN	$1,204	13.6%	$1,005	12.0%	$1,135	12.9%	$1,359	8.6%
Memphis, TN-MS-AR	$1,409	22.0%	$1,139	10.6%	$1,362	21.2%	$1,561	22.6%
Miami-Fort Lauderdale-West Palm Beach, FL	$2,800	51.6%	$2,450	45.9%	$2,462	45.7%	$3,150	54.8%
Milwaukee-Waukesha-West Allis, WI	$1,525	9.3%	$1,200	6.2%	$1,428	9.8%	$1,750	10.7%
Minneapolis-St. Paul-Bloomington, MN-WI	$1,580	5.5%	$1,245	4.2%	$1,495	5.5%	$1,925	4.4%
Nashville-Davidson–Murfreesboro–Franklin, TN	$1,760	24.2%	$1,749	22.7%	$1,618	20.3%	$1,914	26.9%
New Orleans-Metairie, LA	$1,798	12.4%	$1,300	28.4%	$1,590	6.3%	$2,020	7.8%
New York-Newark-Jersey City, NY-NJ-PA	$2,845	18.0%	$2,581	29.1%	$2,573	12.2%	$3,166	13.1%
Oklahoma City, OK	$985	13.0%	$913	30.6%	$916	14.6%	$1,050	11.2%
Orlando-Kissimmee-Sanford, FL	$1,927	32.9%	$1,630	23.7%	$1,772	30.9%	$2,190	36.9%
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	$1,775	7.6%	$1,413	2.0%	$1,679	4.1%	$1,975	6.1%
Phoenix-Mesa-Scottsdale, AZ	$1,915	20.1%	$1,429	20.4%	$1,650	20.7%	$2,225	14.7%
Pittsburgh, PA	$1,475	4.2%	$1,261	12.4%	$1,450	5.7%	$1,592	-2.0%
Portland-Vancouver-Hillsboro, OR-WA	$1,764	12.1%	$1,400	9.8%	$1,710	11.2%	$2,049	11.8%
Providence-Warwick, RI-MA	$2,200	25.4%	$1,468	4.9%	$1,765	13.5%	$2,575	29.9%
Raleigh, NC	$1,615	23.9%	$1,458	22.1%	$1,485	24.5%	$1,791	21.3%
Richmond, VA	$1,435	17.0%	$1,147	15.0%	$1,305	18.1%	$1,559	16.4%
Riverside-San Bernardino-Ontario, CA	$2,729	12.3%	$1,400	-6.7%	$2,184	14.5%	$3,000	13.3%
Rochester, NY	$1,320	9.5%	$980	8.6%	$1,265	13.6%	$1,405	7.7%
Sacramento–Roseville–Arden-Arcade, CA	$2,045	10.1%	$1,845	11.5%	$1,901	7.6%	$2,230	10.9%
San Antonio-New Braunfels, TX	$1,385	19.4%	$1,242	16.4%	$1,264	20.1%	$1,599	21.0%
San Diego-Carlsbad, CA	$3,125	25.6%	$2,447	23.1%	$2,769	22.5%	$3,500	23.5%
San Francisco-Oakland-Hayward, CA	$3,000	11.1%	$2,350	15.6%	$2,750	11.4%	$3,500	9.5%
San Jose-Sunnyvale-Santa Clara, CA	$3,165	19.9%	$2,490	23.9%	$2,920	18.8%	$3,545	18.2%
Seattle-Tacoma-Bellevue, WA	$2,165	17.2%	$1,799	23.4%	$2,145	16.2%	$2,633	18.4%
St. Louis, MO-IL	$1,331	8.7%	$1,000	6.1%	$1,272	10.8%	$1,462	6.1%
Tampa-St. Petersburg-Clearwater, FL	$2,163	27.8%	$1,989	28.0%	$1,896	28.0%	$2,390	26.6%
Virginia Beach-Norfolk-Newport News, VA-NC	$1,531	13.4%	$1,343	10.6%	$1,436	10.6%	$1,669	12.8%
Washington-Arlington-Alexandria,DC-VA-MD-WV	$2,115	12.4%	$1,722	14.1%	$2,017	12.2%	$2,499	10.6%

Methodology

Rental data as of April for units advertised as for-rent on Realtor.com®. Rental units include apartment communities as well as private rentals (condos, townhomes, single-family homes). All units were studio, 1-bedroom, or 2-bedroom units. We use communities that reliably report data each month within the top 50 largest metropolitan areas. National rents were calculated by averaging the medians of the 50 largest metropolitan areas.Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.

Note: With the release of its February 2022 rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting rental listing trends and metrics. The new methodology is expected to yield a cleaner and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better account for cases where new or missing data may not be completely at random. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since March 2022 will not be directly comparable with previous releases (files downloaded before March 2022) and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.

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In most of the largest metropolitan areas in the U.S., the typical cost of rent exceeds the typical cost of a monthly mortgage payment – and that spells opportunity for homeowners considering renting out their properties in those locales, according to real estate website Zillow.

The company said it ran the numbers and found that typical rent payments were higher than mortgages in 33 of the nation’s 50 biggest metros, with Memphis, Tenn., having the greatest gap, followed by Miami and Atlanta. Southern cities dominated the top 10, but a few Midwestern metros hit the rankings, too.

Zillow also pointed to a recent study by the Pew Research Center, which showed that seven out of 10 rental properties in the U.S. are owned by individuals and that those individuals typically own just one or two properties. 

RENTERS CAN AFFORD TO LIVE ALONE IN THESE CITIES IN 2021: REPORT

“Single-family homes comprise about one-third of the nation’s total rental stock,” Zillow economist Alexandra Lee said in a statement. “Owners who do rent out their properties can provide both much-needed rental inventory in tight markets as well as sought-after space and amenities for families looking to move up from an apartment.”

Zillow also reported its data shows that while rent growth across the U.S. slowed dramatically following the coronavirus outbreak, it rebounded quickly in 2021 with Zillow’s numbers showing rents in July are up annually in all 50 major metros. 

Here’s a breakdown of the top 10 cities in the U.S. where typical rents are more than typical mortgage payments.

Top 10 cities where rents exceed mortgages:

Memphis, Tennessee (iStock)

1. Memphis

Typical monthly rent: $1,504

Typical monthly mortgage: $948

Difference: $556

Size ranking: 41

2. Miami

Typical monthly rent: $2,249

Typical monthly mortgage: $1,727

Difference: $522

Size ranking: 8

3. Atlanta

Typical monthly rent: $1,787

Typical monthly mortgage: $1,363

Difference: $424

Size ranking: 9

4. Birmingham

Typical monthly rent: $1,271

Typical monthly mortgage: $868

Difference: $403

Size ranking: 49

5. Tampa

Typical monthly rent: $1,819

Typical monthly mortgage: $1,435

Difference: $384

Size ranking: 19

6. Indianapolis

Typical monthly rent: $1,375

Typical monthly mortgage: $1,044

Difference: $331

Size ranking: 33

7. Orlando

Typical monthly rent: $1,758

Typical monthly mortgage: $1,444

Difference: $314

Size ranking: 27

8. Charlotte

Typical monthly rent: $1,628

Typical monthly mortgage: $1,339

Difference: $290

Size ranking: 24

9. Oklahoma City

Typical monthly rent: $1,210

Typical monthly mortgage: $931

Difference: $279

Size ranking: 42

10. Detroit

Typical monthly rent: $1,387

Typical monthly mortgage: $1,119

Difference: $268

Size ranking: 12

https://www.foxbusiness.com/real-estate/cities-with-higher-rent-payments-vs-mortgages

There’s no doubt that 2020 was a tough year for many investors in just about every sector, but with the uncertainty of the election behind us and in light of the news of numerous vaccines on the way, there’s a renewed sense of optimism out there. I know I am very excited about the opportunities 2021 will bring. Here’s the way I see it…

The economic transformation was already happening. COVID-19 just kicked it into overdrive. In many markets, particularly here in my backyard, South Florida, people are abandoning their high-rise apartments and condominiums because of the pandemic. Even though the vaccines may be on their way, the migration has begun and there’s no stopping the trend now. Renters want to trade in their confined surroundings for the open-space living that comes with the kind of multifamily properties that I invest in. Not even the fact that landlords have significantly lowered rents of those apartments has been able to stop the exodus. This means that while the value of large apartment buildings goes down the value of multifamily communities is projected to rise, possibly by double digits.

Also, the trend of people working from home is going to be permanent in a lot of cases. People who used to live in small apartments in the city just to be close to work are now telecommuting from bigger and more comfortable residences in communities that offer more luxury and more amenities at much lower rents than you find in New York, Los Angeles, Atlanta, Chicago and the other major markets.

Another factor that’s going to have a lot to do with the shifting real estate investment landscape is the concentration of new jobs in certain up-and-coming markets. 30 markets containing 40 percent of the country’s population benefitted from a 60 percent job creation influx since 2015. People go where the jobs go. That means a growing demand for housing and it will continue for years because the nature of jobs is changing. Most jobs are found in companies that provide some type of service or in offices. Demand for IT support, support personnel, and healthcare workers in particular has grown considerably. When demand like this occurs, businesses in the same industry tend to cluster in markets where these services already exist. This stimulates the job market which attracts potential renters. See where this is going?

What it boils down to is that demand for housing in these markets will continue to grow at a quicker rate than developers can build new residences. This is good news for investors like me and those who invest with me because demand will keep going up…and so will rents.

Last year showed us how vulnerable local economies in smaller markets were. Unemployment went through the roof while home prices skyrocketed as people left the cities. Thankfully the unemployment rate is down. This means that more people will be in the position to rent a unit in a multifamily property in one the many markets that have benefited from people leaving the crowded urban areas.

Many of these up-and-coming markets present interesting opportunities, especially for entry-level investors. These units are tangible assets, which almost always increase in value and are by far the best and safest way to generate passive income.

Cardone Capital is constantly watching these areas for new opportunities and already has some deals in the works so anyone interested in this type of investment should definitely consider investing with us as we do all the work. Cardone Capital has nearly $2 billion in assets under management and currently pays out nearly $2 million a month in distributions.

https://thinkrealty.com/why-rental-properties-are-a-great-investment-in-2021/?inf_contact_key=ac21a577ce2c77af2686587d9a74d10a680f8914173f9191b1c0223e68310bb1

The Covid-19 pandemic is wreaking havoc on the U.S. rental market. Approximately 9 million households have so far failed to pay their May rent, according to industry data. Last month, 1.4 million fewer households paid their rent compared with this time last year.

The country’s 44 million rental households are uniquely vulnerable amid the current public health and economic crises. Renters often lack financial security and legal protections, not to mention bargaining power vis-a-vis their landlords. Worse, many are now being hit by the worst economic downturn since the Great Depression. Low-income renters, especially, work in industries crippled by Covid-related job loss: retail, hospitality and leisure, restaurants, and construction. Data suggests that 16.5 million renter households have already lost income because of the economic shutdown.

Faced with the specter of massive housing loss, policymakers have taken some steps to keep tenants in their homes, not only to help the renters but also as a critical public health measure — after all, it’s hard to comply with a “stay at home” order if you don’t have a home, or to socially distance if you’re forced to move into tight quarters with family or friends. The CARES Act has temporarily protected many renters by providing billions of dollars for emergency housing assistance, significantly expanded unemployment benefits and halted some evictions through July. Dozens of states and cities have also temporarily halted evictions, and citiessuch as Los Angeles, Chicago and Philadelphia are providing emergency funding for tenants.

It appears these stopgaps are working, at least for now: We have not seen as severe a spike in nonpayment of rent as might otherwise be expected, and early rent payment figures from May look a bit more encouraging than April’s numbers.

But these remedies focus on the short term. Because of the scale of this downturn, many if not most unemployed renters will not have new jobs by the end of July. The federal government needs a long-term plan to prevent millions of unemployed renters from losing their homes when eviction moratoriums and unemployment sweeteners run out.

More shutdowns coming

Indeed, public health experts are predicting that the Covid-19 crisis will last well beyond the summer, and some government officials are bracing for waves of shutdowns that could continue for 12 to 18 months. It’s also likely that the U.S. will get hit with another, perhaps more deadly, wave of the virus next winter. When the economy does reopen, it will be in the throes of a deep recession during which millions of middle-income tenants will likely be unemployed and require housing assistance for the first time. Without smart, proactive policies to help millions of unemployed renters, we will be facing billions of dollars in rental debt, chaos at the eviction courts and overcrowded shelters primed for another outbreak.

Renters were struggling before the Covid-19 outbreak amid a well-documented affordable housing crunch. Nearly 40 percent of renter households are rent-burdened — meaning that they spend more than a third of their salary on rent — and two-thirds of renter households can’t afford an unexpected $400 expense.

On top of that, renters have few of the legal and financial protections offered to homeowners. Many states forbid renters from withholding rent even if their unit is in disrepair, most renters have no right to legal counsel during eviction proceedings, and once eviction judgments are handed down, renters can be evicted in a matter of days. And, partly as a result of the subprime mortgage crisis of 2008, federal housing policy heavily favors homeowners over renters. Congress spends approximately three times as much on mortgage-interest reduction as it spends on rental housing vouchers each year. Whereas mortgage holders are protected by the provisions of the Dodd-Frank Act, notably through creation of the Consumer Financial Protection Bureau, no analogue exists for renters.

For the moment, these renters are being kept afloat through a combination of short-term emergency cash, unemployment benefits and eviction bans. But it won’t last past the summer. On top of the one-time $1,200 stimulus check, the extra $600 per week added to unemployment insurance checks expires in July. Unemployment doesn’t cover everyone, notably our 10 million to 12 million taxpaying undocumented immigrants — many of whom are renters — and those working in the informal economy providing child care, cleaning and other services. Another 8 million to 12 million unemployed Americans haven’t even bothered to apply, due to a well-documented backlog of claims and the difficult application process.

It’s not clear what appetite Congress has for extending the current short-term stimulus measures. Lawmakers might choose to extend the $600 per week unemployment sweetener past July. An extra $2,400 per month is more than enough to cover rent for most Americans, and once unemployment offices dig out from the initial crush of claims, delivering this assistance would be an efficient and direct way to keep more people in their homes. Yet Republicans are concerned that these expanded benefits are discouraging people from returning to work, and any such proposal would have to survive tough negotiations.

Meanwhile, the $300 billion recently provided in the most recent stimulus package to keep small business workers on payroll is likely already gone. Temporary rental assistance remains underfunded by tens of billions of dollars, and need is only growing as layoffs continue.

Mom-and-pop landlords

While landlords should be encouraged to reduce payments or implement repayment plans, canceling rent isn’t a viable option for many of them. The prototypical rental unit might be inside a high-rise apartment building owned by a real estate giant, but in fact the overwhelming majority of rental properties in this country are single-unit homes owned by mom-and-pop landlords. These property owners rely on rent to pay their own mortgages, to finance repairs and upkeep of rental properties, and to pay property taxes.

So, protecting tens of millions of renters in the midst of a deep recession won’t be easy. But Congress needs to recognize the importance of keeping rent checks flowing. Delinquent rents could easily spiral into foreclosed units and a consolidation of rental stock similar to Wall Street buy-ups after the Great Recession. That means an increase in substandard housing, worse property management and more marginalized Americans. What’s more, evictions cost U.S. cities hundreds of million of dollars per year. That money should be helping to prop up a struggling economy instead.

But while difficult, it’s not impossible to prevent a rental-housing crisis. Congress needs to expand direct rental assistance. That means cash for rent, sent either directly to landlords or renters.

The National Low Income Housing Coalition estimates that $100 billion in rental assistance would support 15.5 million low-income households over the next year. The Urban Institute’s estimate is about twice that, and accounts for renters of all incomes. That line item’s a drop in the bucket compared to the total stimulus funding Congress anticipates pushing through this year, and will stabilize millions of Americans’ largest household expenditure.

Several mechanisms

There are several mechanisms Congress could chose for this. Cash could be directly provided for rent through the Department of Housing and Urban Development’s existing Emergency Solutions Grant network, in which local services providers administer funds to those at risk of homelessness, or through temporary expansion of the department’s Housing Choice Voucher program, through which local housing agencies pay landlords a portion of low-income tenants’ rent. While some housing agencies might face a flurry of new applications, most unemployed American renter households with zero income would easily qualify.

Alternatively, Congress could attempt to funnel money more directly to landlords. The benefit of this approach is that there are fewer landlords than tenants, and they’re easier to track down. The drawback is that this approach would involve creating an entirely new program. If Congress goes this route, it could model a program on the Treasury Department’s Home Affordable Modification Program (HAMP), focused on landlords’ non-owner occupied homes, or expand the Federal Reserve’s Main Street Lending program to allow lending to the rental industry.

The bottom line is that Congress needs to find a way to inject funding into the rental ecosystem — whether through unemployment insurance, rental assistance or direct payment to landlords. Protecting our renters won’t be cheap, and it won’t be easy. But ignoring the coming crisis will cost billions more down the line in the form of rental debt and landlord foreclosures, and could keep millions of Americans from safely sheltering in place. That’s something we truly can’t afford.

https://www.yahoo.com/news/rental-crisis-coming-avoid-163959843.html

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