Thinking of becoming a landlord? Then you might want to take a look at this. Real estate data company RealtyTrac released numbers today ranking the top 25 markets with hidden gems: inexpensive single-family homes with strong returns from rental income.
The crash in housing prices has made this an attractive time to buy income property -- a fact not lost on the big institutional investors. And mortgage rates are still low, too, shrinking the barrier for the little guy who might not be able to pay cash.
Yet although renting out single-family homes "still yields solid returns in many markets," says RealtyTrac Vice President Daren Blomquist, individuals can't find good deals because so many markets are "dominated by the 800-pound gorillas."
So RealtyTrac has identified the top overlooked markets, he says -- "where single-family rentals still make good financial sense but where there is little to no competition from the big players.”
RealtyTrac and rental market analyst RentRange looked at 450-plus counties of 100,000 residents or more, ranking the 25 metro areas with the highest gross rental yields -- that is, a home's annual rental income divided by its median value -- in counties where unemployment was no higher than 7.5 percent and where no more than 5 percent of residential sales from May through June involved institutional investors as the buyer. (Institutional investors were defined as those that had bought 10 or more single-family homes in 12 months.)
These 25 markets came out on top with the highest gross rental yields. | By Jennifer Karmon, Yahoo Homes