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ABQ third-best metro for making money owning rental housing

This is the pool at Broadstone Santa Monica in Albuquerque.

This is the pool at Broadstone Santa Monica in Albuquerque.

Copyright © 2013 Albuquerque Journal

Albuquerque is the third-best metro in the country to make money owning rental housing, according to new rankings from Seattle-based All Property Management.

Based on an analysis of primarily federal data, the Albuquerque metro area emerges with particularly strong ratings for measures of rent growth and return on investment in owning rentals across all housing types – from detached, single-family homes to apartment complexes.

Albuquerque holds up comparatively well among the 75 ranked metros for vacancy rate, recent job growth and future property appreciation, according to the online network of property management services.

In a recent news release on the rankings in its Rental Property Management Health Index, All Property Management quotes several local professional property managers offering explanations of why Albuquerque would be a profitable place to own rentals.

Churn in the workforce, stemming in part from government-related job opportunities, contributes to a strong rental market, Cindi Reeves of Real Property Management in Albuquerque is quoted as saying.

“Albuquerque is a bit transitional for a lot of people, so many choose to rent a property versus buying unless they know they will be here for three or more years,” Reeves says. “Homes haven’t appreciated to pre-recession pricing, so owners are opting to rent out their homes and wait until the market fully rebounds.”

Rental rates in Albuquerque are still reasonable compared to income, with diverse submarkets of homes for investors and renters to choose from, says Mark Webb of Real Property Management Rio Grande in the news release.

In the Rental Property Management Health Index, Albuquerque ranks behind No. 1 Grand Rapids, Mich., and Bakersfield, Calif., and just ahead of Rochester, N.Y., and Worcester, Mass. Ranked at the bottom of the index are Riverside, Calif., and Milwaukee.

Here’s the index’s basic measures for Albuquerque:

⋄  Average vacancy rate of 6.38 percent for a rank of 23 out of 75 metros, based on census data.

⋄  Average year-over-year rent change of plus 10.53 percent, for a rank of 14, based on Department of Housing and Urban Development data. The rate factors in single-family home rentals.

⋄  A cap rate, or return on investment, of 10.8 percent for a rank of sixth highest, based on HUD data.

⋄  Projected home-price appreciation of 4.5 percent from the first quarter of 2013 to the first quarter of 2015, for a rank of 37, based on CoreLogic and CNN Money data.

⋄  A job growth rate of 1.92 percent for the 12 months ending with July, for a rank of 28, based on Bureau of Labor Statistics data.

The index is partly a response to the housing recovery from the standpoint of real estate investors, said Jacob Colker of All Property Management.

“The housing crisis created some good deals for investors. Those good deals are largely gone,” he told the Journal, explaining that the index can be a starting point for investors looking to explore new markets with an upside.

“It’s harder to find hidden gems. Albuquerque is an example (of a hidden gem),” he said. “This is not a definitive perspective of Albuquerque. It’s a guidepost.”

In a recent news release on the rankings in its Rental Property Management Health Index, All Property Management quotes several local professional property managers offering explanations of why Albuquerque would be a profitable place to own rentals.

Churn in the workforce, stemming in part from government-related job opportunities, contributes to a strong rental market, Cindi Reeves of Real Property Management in Albuquerque is quoted as saying.

“Albuquerque is a bit transitional for a lot of people, so many choose to rent a property versus buying unless they know they will be here for three or more years,” Reeves says. “Homes haven’t appreciated to pre-recession pricing, so owners are opting to rent out their homes and wait until the market fully rebounds.”

Rental rates in Albuquerque are still reasonable compared to income, with diverse submarkets of homes for investors and renters to choose from, says Mark Webb of Real Property Management Rio Grande in the news release.

In the Rental Property Management Health Index, Albuquerque ranks behind No. 1 Grand Rapids, Mich., and Bakersfield, Calif., and just ahead of Rochester, N.Y., and Worcester, Mass. Ranked at the bottom of the index are Riverside, Calif., and Milwaukee.

Here’s the index’s basic measures for Albuquerque:

⋄  Average vacancy rate of 6.38 percent for a rank of 23 out of 75 metros, based on census data.

⋄  Average year-over-year rent change of plus 10.53 percent, for a rank of 14, based on Department of Housing and Urban Development data. The rate factors in single-family home rentals.

⋄  A cap rate, or return on investment, of 10.8 percent for a rank of sixth highest, based on HUD data.

⋄  Projected home-price appreciation of 4.5 percent from the first quarter of 2013 to the first quarter of 2015, for a rank of 37, based on CoreLogic and CNN Money data.

⋄  A job growth rate of 1.92 percent for the 12 months ending with July, for a rank of 28, based on Bureau of Labor Statistics data.

The index is partly a response to the housing recovery from the standpoint of real estate investors, said Jacob Colker of All Property Management.

“The housing crisis created some good deals for investors. Those good deals are largely gone,” he told the Journal, explaining that the index can be a starting point for investors looking to explore new markets with an upside.

“It’s harder to find hidden gems. Albuquerque is an example (of a hidden gem),” he said. “This is not a definitive perspective of Albuquerque. It’s a guidepost.”

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