Central US experiences high investment opportunities

Lincoln, Nebraska, may have many investment opportunities.

More property management companies and investors may be looking toward the central section of the country for real estate rental investment, according to a report from Local Market Monitor and HomeVestors.

There are still several opportunities for investment in large cities across the country, but smaller cities may be the best bet at this time, analysts said. Specifically, cities in between population levels of 200,000 to 500,000 have stronger employment levels, and many have a stronger outlook for housing and future job growth, the report explained.

Cities such as Houma, Louisiana; Lincoln, Nebraska; Ann Arbor, Michigan; Erie, Pennsylvania; and Fort Wayne, Indiana, were listed as smaller cities with a low premium risk. Ingo Winzer, president and founder of the Local Market Monitor, explained that investors may want to use caution when looking at some of the top cities on the list, as they should focus more on these smaller options. This is because of the economic situations and housing supplies in these areas.

"Many of the California markets were over-developed during the housing boom because home prices were still affordable compared to the big coastal markets; lower prices on the coast now diminish that attraction," Winzer stated. "The Florida and Nevada markets were heavily developed for second-home buyers, now evaporated, leaving them with too much supply for local demand to absorb. In Detroit, the population is just outright shrinking."

Smaller markets may be best for investment
David Hicks, the co-president of HomeVestors, explained that it is important for industry members to not neglect the the smaller markets. This is because these areas always need rental properties to fill up, and there are many potential tenants looking for work.

He also explained that the home investment market experienced increased interest in recent times, which could further attract commercial buyers.

Winzer added that the smaller cities have improved market conditions for a couple of reasons. The overall rental situation is improving, which will make more investors want to take advantage of these housing options. Additionally, single-family properties will be good to rent, as there is a boosted level of economic growth in these smaller cities. This will help rental prices rise as the growth has more people purchasing homes, taking down the level of supply in these areas.

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