Looking for an investment rental? New findings of HouseCanary—a provider of predictive real estate analytics and insights—suggests that the best deals are to be found in the cooler markets. At this time of year when activity is declining, investors are revealed to likely have better opportunities in markets with lower temperatures. In short: markets where slowdowns coincide with colder temps are home to the better investment prospects.
For example, in the Greater Cleveland metro area, activity declines when the frost sets in at the end of the year. The area also has a high effective gross yield, which factors local prices, rents and takes into the 13% rental yield. On the contrary, the Greater L.A. metro area’s effective gross yield remains even throughout the year at 4.5%, where the weather is more constant.
Alex Villacorta, Executive Vice President of Analytics for House Canary stated “It’s well known that real estate markets exhibit seasonal fluctuations in terms of both demand and pricing, but it’s not always well known exactly where those seasonal fluctuations occur… And for real estate investors who want to buy at lower prices in strong rental markets, this can mean the difference between an acceptable acquisition and minimal return on investment.”