It’s a hard time to be a landlord. With tenants struggling financially, eviction moratoriums in place, and rents falling, it seems many rental investors just can’t catch a break. Fortunately, it’s not all doom and gloom everywhere.
In fact, there are actually quite a few markets where rents are rising. If you’re on the hunt for a new investment (or just a way to balance out those losses you’re dealing with), these might be the markets you want to consider.
Chesapeake, Virginia, and Norfolk, Virginia
According to data from rental platform Zumper, rents on one-bedroom properties in Chesapeake rose 5.4% last month, clocking in at just under $1,200. It’s the 38th most expensive rental market in the country.
Nearby Norfolk is also a safe bet. Rents on one-bedrooms increased 5.2% over the month.
Rochester, New York
In Rochester, renters saw a 5.3% increase in price on one-bedroom properties -- the second-highest jump in the United States. On two-bedroom properties, rents rose 4.3% for the month.
Looking for an investment outside of the Northeast? Cleveland may be a safe bet. Rents rose 5.1% on one-bedrooms last month, coming in at just over $1,000.
Nebraska’s capital is also on the up-and-up. The city had the fifth-highest jump in rents last month, with one-bedroom properties averaging about $850 per month.
Looking for short-term rentals?
If you’d rather invest in short-term rental properties and Airbnbs, the list looks a bit different. In light of COVID-19, today’s vacationers are often looking for close-to-home getaways, making small, more rural towns outside major cities a big hit.
Here’s what Airdna, a short-term rental data firm, says are the best markets for short-term rental investing at the moment:
- Castroville, California
- Slade, Kentucky
- Cherry Log, Georgia
- Shenandoah, Virginia
- Athens, New York
- Apollo Beach, Florida
- Stanton, Kentucky
- Kerhonkson, New York
- Two Harbors, Minnesota
- Gerton, North Carolina
Castroville is the real winner on the list. Competition is low (there are currently only 27 active properties), and annual revenue potential is high (a whopping $114,000!). Located about an hour south of San Jose and an hour and a half from San Francisco, it’s the perfect getaway for many Bay Area residents.
The bottom line
There are definitely challenges to being a rental investor in today’s climate, but remember: Not all investments are created equal. Be extra thoughtful about where you invest, and take into consideration rental trends, as well as the changing habits of tenants and travelers.
Finally, be sure you have an exit strategy. There’s no telling how long the pandemic will last, so make sure you have a solid out to reduce your losses.