NEW YORK (TheStreet) -- With the economy supposedly improving -- in fits and starts, anyway -- buying a residential rental property could make good business sense.
Supply and demand, not to mention common sense, says people will always need a place to live, and with the balky housing market discouraging many buyers, more Americans are looking to rent these days rather than own a home.
"Reversing the long uptrend in homeownership, American households have increasingly turned to the rental market for their housing. From 31% in 2004, the renter share of all US households climbed to 35% in 2012, bringing the total number to 43 million by early 2013," says a Harvard University study.
It's best to buy a rental property near you so you can keep better track and better respond to a renter's needs, but an investor has rot look at buying a home where the opportunity for profit potential is highest.
That's where RealtyTrac and its Q2 2014 Residential Property Rental Report can help potential landlords. The report checks out median sales prices for residential property and average fair market rents for "average" three-bedroom properties in 370 U.S. counties, thus representing a good cross section of the nation's rental market (60% of the total U.S. population).
Prospects are already good for rental property owners in 2014, with RealtyTrac estimating that, in the second quarter they earned a 9.97% return on their investments with an upswing in median home prices and monthly rental rates.