Where is a good place for Real Estate Rental Opportunities?

Before you look at particular rental “hotspots”  throughout the world,  there are a number of parameters you have to factor into your thinking before making a rental property investment decision.

How to be attractive

For a town or a city to be attractive for people to live in you have to consider not only how stable employment is, in and around the area,  but also, what career prospects look like for the future,  in relation to the industries in and close to areas of interest.

Career prospects are always linked to what the growth prospects of the industries in these areas look like.

Before the Credit Crunch

Before the credit crunch really hit home, tourism, energy, manufacturing and finance were the driving forces behind many economies.

A year later we find these industries have declined as quickly as snow melting on a sunny day, and now we are finding government programmes with complicated financial structures that are propping up many sectors of many economies.

These measures are holding fragile economies together,  but,  they are not permanent and we have to consider how long governments will be able to sustain these massive financial intervention methods.

How to be in Pole Position

Currently, cities with robust job prospects and stable employment are proving to be most attractive for the real estate rental sector.

It is interesting to observe that the degree of severity during a downturn like this has less impact on employment areas where people have to create new ideas, in other words, where people are paid to think.

Taking this a stage further, consider the professions where people work in the likes of science, engineering, architecture and education.

These types of careers are providing the better job opportunities, and the areas to factor in when looking at where you want to build a rental portfolio.

Now let’s look at America, and the American rental sector

In America there are cities of different sizes which include outlying areas all of which contribute to the overall stability of the “economic bubble” within these city and suburban areas.

Top 10 rental cities in America

Research has shown that at present ( July 2009 ) areas now at the vanguard of the American economic recovery include:

• Huntsville, Alabama  (population about 545,770 as of 2008 census ).
• Albuquerque, New Mexico   (population about 521,999 as of July 2008 census
• Washington, D.C. ( population about  6,549,224 as of 2008 census )
• Charlottesville, Virginia. ( population about  41,228 as of 2008 census )
• Athens, Georgia. ( population about 173,442 as of 2008 census )
• Olympia, Washington . ( population about 45,322 as of 2008 census )
• Madison, Wisconsin ( population about  231,916 as of 2008 census )
• Austin, Tex.  population about  757,688 as of 2009 census )
• Flagstaff, Ariz. population about  127,450 as of 2007 census )
• Raleigh, North Carolina ( population about  392,552 as of 2008 census )

So if you are looking where to buy rental properties in America and you want to know that long term employment prospects will keep your tenants in your rental properties for a long time with stable job prospects, the above areas are certainly worth considering.

Australian rental sector

Sydney and Canberra are well placed in the areas of employment and public sector involvement, making them areas where there is a strong demand for rental properties.

It appears that people are unable, or unwilling to commit to house purchase in these areas due to the very high property prices

Rental Demand continues

Due to the high property prices in Sydney and Canberra, you will find, of the people wishing to live in these attractive areas;  a large proportion are looking at rental properties as being the best way to establish themselves in these areas.

Obviously when demand is strong, rental prices are also strong and more importantly, liable to remain stable.

This scenario is a great “decider” for people who wish to invest in real estate for rental purposes,  and does not only apply to Australia!

The United Kingdom Rental Sector

Before the credit crisis hit the United Kingdom,  lending policies were so slack that everybody and their auntie was taking out a mortgage!

Now these lenders are weeping and wailing ……wishing they had been more prudent in their lending!

It’s too late to look back.

Currently,  many foreign investors are seeing certain areas throughout the United Kingdom as being prime targets for investment properties.

The excesses of the property boom in the UK, when many thousands of people were given mortgages they couldn’t really afford,  has resulted in the country being seen by bargain hunters as a preferred target as re-possessions rise.

Below I have indicated some of the larger populated parts of the UK … please take note here that some of these areas have been severely effected by job losses and therefore unemployment is on the rise ( almost touching 2.5 million for the whole of the UK, as of 12th August 2009 ).

Rental Opportunities

Property investors are aware of the potential value in buying repossessed property,  and see some parts of the UK as ideal “opportunity areas” for purchasing rental property.

The population figures indicate the potential for demand for housing accommodation.

Due to the chronic shortage of good housing stock, rental properties will continue to be in demand.

Help with the rent!

Obviously, employment is an important issue in all these areas,  but Government help in the form of Local Housing Allowances  has resulted in people who are no longer in work,  or in lesser paid jobs, to still to be able to afford their monthly rental payments.

Ability to meet rental payments is an important part of your decidion making process,  no matter what part of the world you are investing in,  when deciding on the location(s) of your real estate purchase.

Areas Investors are looking at…  for bargain properties!

I have noted below areas that are being targeted by investors looking for a bargain

• The Greater Metropolitan area of London ( population 13,000.000 from census in 2007)
• Birmingham ( population  1,006,500 from census in 2006 )
• Liverpool( population  435,500 from census in 2007 )
• Leeds: ( population 761,100 from census in  2007 )
• Newcastle: ( population  189,863 from census in 2001 )
• Bristol: (  population  416,400  from census in 2007)
• Cardif( population 321,000 from census in 2006 )
• Edinburgh ( population  471,650 from census in 2007 )
• Perth( population   43,450 from census in 2001 )
• Stirling( population  41,243  from census in 2001 )
• Glasgow( population   580,690 from census in 2005 )
• Aberdeen( population  202,37 from census in  2007 )

Above is a selection of cities/ areas,  all with potentially strong housing demands and,  as a consequence, potentially strong rental demand.

Many of these areas are well positioned to capitalise on the recovery ( when it happens).

This will mean that employment and career prospects in these areas will certainly look promising, as the entire country begins to experience the “green shoots of recovery” .

This article has only touched on a few areas throughout the world that show potential for Real Estate Rental Property investors who wish to start to build a rental portfolio, or wish to expand their current Rental Portfolio.

Further articles will be released in the coming months on this topic, and I will  “travel round the world” providing helpful information to all my readers.

It would certainly be of great benefit to my readers, if anyone reading this knows of good property rental demand in their local area.  This can be anywhere in the world.

So, if you want to contribute with your knowledge and or experience,  why not pop an email to Rentals@buildarentalportfolio.com and tell us a little about the rental demand in your area.

I will say thanks now for your support!

The next article is about how to Investment in Rental Property with little or no deposit!.. and it also explains how people from anywhere in the world,  with access to a computer can turn themselves into successful real estate rental entrepreneurs!