Survey finds best markets to invest in rental property

HomeVestors Of America and Local Market Monitor recently announced the results of their joint study, which found that Las Vegas was the best market to invest in rental property.

The quarterly-updated study reported 14 percent of single-family homes in the United States are rental properties. The rankings are based on three-year forecasts of home prices and gross rents. Other markets that were ranked in the top 10 include Detroit, Michigan, Tampa-St. Petersburg, Florida, and Phoenix, Arizona. President of Local Market Monitor, Ingo Winzer, said the highest ranked markets had the greatest decrease in home prices, leaving many empty homes to be turned into rental properties.

According to the study, each market still has risks. In Las Vegas, Nevada, for example, home prices are down 45 percent since 2006, rents have dropped 10 percent and the unemployment rate is 12 percent. While other markets are growing such as Phoenix, Arizona, where there is job growth. Although home prices fell 40 percent, rents decreased only 8 percent.

Some markets, such as Baltimore, Maryland, are experiencing a mix of good and bad housing reports. According to the Zillow's Home Value Index, Baltimore Metro experienced a 0.1 percent increase in home value from April to May 2011, but still remains 7.3 percent lower than home values from a year ago. And while there are 7 percent fewer homes on the market in 2011 than in 2010, the Clear Capital Home Index Forecast for the second half of 2011 predicts Baltimore will experience a 2-7 percent decrease in home prices by the end of the year.  

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