Columbus, OH One of Best Markets For Landlords

RealtyTrac studied 370 major U.S. counties in order to determine the most attractive markets for landlords. Its results are based on factors including unemployment rates, median home prices, average rents, and demographics. An article released by CNNMoney states that, regarding demographics, a presence of large millennial and baby boomer populations is ideal because both groups are undergoing major life changes that sometimes entail changes in housing. While a significant number of baby boomers move to Florida, millennials are more spread out across cities such as Philadelphia, Pennsyvania and Atlanta, Georgia.

The results list Columbus, OH as the eighth best market for landlords. The median sales price for a home in Columbus is $125,000, while the average rent for a 3-bedroom place is $1,039 per month. This translates to a gross rental yield of 10%

The single best market in which to be a landlord is Anderson, South Carolina. Here, the median home sales price is only $69,900, and the average rental rate (again for three bedrooms) is just under $900, resulting in a 15.3% gross rental yield. Other top ten markets include Gainesville, Florida, Pittsburgh, Pennsylvania, and Charleston, South Carolina.

Post-Grad Housing Market Expected to Improve

90% of Americans 35 and younger prefer to own a home over renting one, according to a recent Fannie Mae survey. However, only 36% do own a home, down from the 2005 peak (43%) and the lowest percentage yet since home ownership by age was first recorded in 1982. Many factors come into play when examining barriers to home ownership, including the following:

• Student debt. It's no secret that the cost of higher education is rising. Moreover, more students are pursuing advance degrades (such as a masters degree or MBA), luring students even further into debt.

• Stagnant wage growth. Recently, wage growth has been offset by higher prices, hindering prosepctive homeowners. 

• Tight lending standards/inadequate credit. Not having enough credit makes it difficult for prospective homeowners to qualify for loans. Tight lending standards make it even more difficult, as lenders are more selective when approving people for home loans. Unfortunately, it takes time to build a good credit score. 

• Competition. Ironically, many of America's "youngest" cities are also the most expensive--New York City, Chicago, Las Angeles, and San Francisco among others. Competition in these cities drives up housing prices, pricing young residents out of the market. Furthermore, people in their 20s and early 30s cannot compete with the all-cash offers that are more common in competitive markets. 

• Low inventory. Low inventory has characterized the housing market for over a year now, meaning the market typically favors sellers over buyers. When in-damand houses enter the market, they tend not to stay there long; some sell within the week. This discourages first-time homebuyers, who want more time before committing to any given house. 

• Inability to generate a down payment. Many of the above points (including stagnant wage growth and student debt) result in the inability to generate a down payment. People in their 20s and 30s have yet to reach their prime earning years, and have also had less time to build up their savings. 

Fortunately, things are looking up for young homeowners. Mortgage lending is loosening up, as lenders approve people with lower credit scores and smaller down payments. As the job market continues to recover from the 2007-2008 crisis, incomes are expected to rise. However, this will likely not result in a housing "boom." Currently, many recent graduates are living with a parent (11 million in 2012, according to Pew Research Center). Instead, college graduates will slowly and steadily trickle out of their parents' homes and into the adult world.