Smaller Markets 'Best-Kept' Investing Secret?

October 17, 2012

Small cities -- with populations between 200,000 and 500,000 -- are some of the places to invest in housing, according to Local Market Monitor and HomeVestor’s latest quarterly rankings of best real estate markets for investing in single-family homes as rental properties. 

“Many of these markets not only have unemployment rates well below the national average, but they show strong job growth and housing prices have bottomed out,” says Ingo Winzer, president of LMM. The smaller markets are “great places to rent out single-family homes because strong economic growth can quickly use up the existing housing options.” 

The top 10 smaller markets for investors, according to LMM, are: 

  • Lafayette, La.
  • Fort Wayne, Ind.
  • Erie, Pa.
  • Corpus Christi, Texas
  • Houma, La.
  • Fayetteville, Ariz.
  • Tyler, Texas
  • Longview, Texas
  • Lincoln, Neb.
  • Ann Arbor, Mich. 

LMM cautions investors to be wary of markets that were overdeveloped during the housing boom. More investors should consider smaller markets for investment. David Hicks, co-president of HomeVestors, agrees. 

“We often see that the smaller markets are the best-kept secret of investing,” Hicks says. “Many of these smaller markets offer a consistent demand for rental properties. Investors can discover for themselves that the big city isn’t the only place with a great deal for investors.” 

Source: Local Market Monitor

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