Looking to rent a place in the sun with good golf courses nearby? Your best bet might be the coastal South Carolina town of Myrtle Beach, a once hot tourist destination for golfers that has now become overbuilt, according to RentRange, a provider of market data and analytics for the housing industry.
As a representative for the real estate investor, RentRange shows where the best buys are, but its data is also helpful for those wanting to rent a single-family home. It just released its report on the top 25 U.S. Metropolitan Statistical Areas (MSAs) by average rental rate increase for single-family three-bedroom homes, comparing the fourth quarter of 2016 to the same quarter in 2015 (see chart at bottom). Its analysis, based on data gathered from 250,000 homes per month, also showed the average vacancy rate within these markets at the end of 2016.
Rental rate increases in areas like Cape Coral, Florida and Portland, Oregon have moved them up the list into the top five, and newcomers such as McAllen, Boston, Denver, Miami and Nashville are also among the leaders, according to RentRange. While rents remain high in the Bay Area, San Francisco dropped several positions, indicating that the year-over-year rent change was not as significant as in past years. Comparatively, San Jose, California made the list as a new addition in the latest period.
The average vacancy rate, which demonstrates the percentage of all available units in a rental property that are vacant or unoccupied at a particular time, showed that the highest rates are in the Southeast, where vacancy rates range from 10.5 percent in Charleston to 20.4 percent in Myrtle Beach.
“In these areas, builders and investors may need to compete for a limited number of renters,” said RentRange, pointing to the oversupply of new properties that’s driving up vacancies and pushing rental rates down. “This is happening in Myrtle Beach, where more than 3,100 new homes were built in 2015, a 94 percent increase compared to two years earlier.”
But overall the rental market “continues to look bright for single-family rental investors,” said RentRange chief executive Wally Charnoff. “Rents continue to increase, which should ultimately stabilize demand, keeping vacancy rates down.”
This is good news for owners who want to rent out their properties – and real estate investors. As for the renters who pay those monthly checks, it may be time to move to the sunny Southeast.