Perhaps you inherited a house, have been renting it out, enjoy being a landlord, and are interested in acquiring additional rental properties. Or maybe you've come into some extra cash and are interested in investing in a property and making a steady rental income. Regardless of the reason, do your homework first. You’ll only make money on your rental property if it is occupied. Here are three hot spots where rentals are always in demand and command top dollar.
1. Miami, Florida
This sunny southern city is a melting pot of cultures. Walk down any busy Miami street and you’ll likely hear Spanish, English, Portuguese, French, German, and Creole being spoken. Miami is the gateway to Latin America and a top tourist spot for Americans, Canadians, and Europeans. With its pristine white-sand beaches, abundant nightlife, world-class restaurants, and energetic ambiance, Miami is a paradise — for tourists and for landlords. The number of Miami residents who rent jumped a whopping 25 percent between 2006 and 2013.
The tourists who flock to Miami year-round keep the city’s huge number of hotels and motels occupied. The service workers who staff them have to live somewhere, and can’t afford to buy a property in a city where the median home sales price tops $300,000. Hospitality workers are plentiful in Miami — and they’re renters.
Besides service workers, Miami is a mecca for young singles who work hard and play hard. From models to marketing gurus, Miami’s large young professional population tends to want to live near the action. Neighborhoods like South Beach and Little Havana are full of rental bungalows, condos, and townhomes. Snag one, maintain it well and you’ll have no trouble keeping it rented out.
2. Scottsdale, Arizona
On the other side of the country from Miami sits another decidedly less-flashy city that’s a smart investment for landlords. Scottsdale is a top destination for snowbirds, retired Northerners who fly south in winter to bask in this city’s year-round warmth. One study estimates the number of annual Arizona snowbirds at more than 300,000. Scottsdale, with its myriad resorts, golf courses, restaurants, and entertainment options is a popular place many of them choose to roost. With a median home price of nearly $400,000, snowbirds are far more likely to snag a rental here than they are to buy a house.
While some snowbirds prefer a long-term rental others opt for short-term. Landlords can command top dollar for these more flexible arrangements. For the rest of the year, there are plenty of potential tenants thanks to Scottsdale’s large hospitality industry. Scottsdale is also a favored spot for Arizona State University professors and graduate students to live. With more than 76,000 students (plus the faculty that teaches them), landlords in nearby Scottsdale have a steady stream of tenants interested in renting, but interested in distancing themselves a bit from Tempe’s undergrad-saturated communities.
3. Dallas, Texas
Everything’s bigger in Texas, they say, and in Dallas that includes the number of renters. Of the more than 484,000 houses in Dallas, 57 percent are occupied by renters. Dallas has a huge single, upwardly mobile professional population. This demographic is a landlord’s dream, as young professionals tend to be responsible and reliable tenants. Currently, median housing prices are on the lower end of the spectrum (around $250,000) and are trending slightly downward. That means landlords ready to invest should take a close look at property in this north Texas city. Neighborhoods like University Park, M Streets, and Oak Lawn command the highest rents because they’re the trendiest and most desirable places to live for young professionals.
If you’re looking to expand your rental property portfolio, take a close look at Miami, Scottsdale and Dallas area real estate. These hot markets are full of renters anxious to sign on the dotted line and find their next home.
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