With landlords earning double-digit returns of 10 percent or more, the rental market has thrived over the past several years. Though high home prices dampened returns for landlords in some markets, other markets still offer plentiful profits, according to RealtyTrac which analyzed rental market conditions in 370 major U.S. counties, including median home prices, average rents and unemployment rates.
While assessing a market, landlords should look for one factor, low unemployment. RealtyTrac suggested investors take the demographics of the area into account as well, especially when it comes to baby boomers and millennials. Markets where these populations are growing rapidly should produce strong returns for investors going forward, said Daren Blomquist, vice president at RealtyTrac.
For baby boomers, born between 1945 and 1964, retirement-friendly markets in Florida are predictably hot, according to RealtyTrac. Some local markets saw their baby boomer population increase by 20 percent or more since 2007. The Tampa-St. Petersburg-Clearwater, FL metro area topped the list among markets where rentals to baby boomers flourished. As for millennial markets, they were scattered around the country. RealtyTrac cited Baltimore, Philadelphia, Jacksonville, Fla. and Atlanta metro areas as leading rental markets for millennials.