If you’re looking to add a single-family rental property to the ‘ol investment portfolio in this year, Chicago may in fact be your kind of town. According to a new study by Home Union, the Windy City ranks among the top five cities in the U.S. to invest in a single-family rental in 2017. The reasons? Projected strong employment growth in 2017, as well as fewer vacancies around the city resulting in higher rent.
In its “2017 Single-Family Rental Report,” California-based real estate investment firm Home Union proclaimed “supply and demand for rental properties nationwide will result in another solid year for investors.
“The economic recovery will continue to generate hundreds of thousands of new household this year, creating an unprecedented demand for single-family rentals, especially as single-family construction levels remain tempered compared to boom periods,” wrote Stephen Hovland, director of research and communications for Home Union.
Chicago was rated as the fifth-best market to invest in a rental property in 2017. Atlanta, with rent growth projected to be 3.5%, topped the list. It was followed by Orlando, Seattle and Las Vegas.
Chicago earned its strong rating largely because of its diversifying economy and dwindling vacancy rate. HomeUnion projects 54,000 new jobs to be added in Chicago by the end of the year, which will push down the vacancy rate to 5.1 percent. Last year it was 6.0 percent. As a result of this change in the supply and demand dynamic, rents are expected to increase by 2 percent by December to an average of $1,568.
HomeUnion advises investors to buy early in the year in order to get the most benefit of these increasingly higher monthly returns.
Rounding out the top 10 of best cities for real estate investment were San Diego, Oakland, Detroit, Dallas and Memphis. The full report from Home Union is chalk-full of information and well worth a look for the serious investor.