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Your ZIP code is a pretty important piece of an address, especially when it comes to the real estate market. HomeUnion, an online real estate investment management firm, identified zip codes in 20 metros that maximize real estate returns while minimizing risk over a five-year horizon. They examined school quality and neighborhood attractiveness for single-family rentals over five years.
“HomeUnion Research Services looked at more than a dozen attributes that characterize a neighborhood including crime, schools, white-collar jobs, unemployment, homeownership, permitting activity, etc.,” said Steve Hovland, director of research for HomeUnion. “Based on those attributes, we forecast appreciation, vacancy and rent changes over the next five years.”
The study calculated Annualized Total Return, which includes HomeUnion’s projections for how much the value of single-family rentals will appreciate and how much cash flow they’re expected to generate. According to Hovland, HomeUnion’s model can determine the price and rent for every single-family home within a specific zip code and allow them to predict the price and rent in five years.
Americans are increasingly investing in real estate to reap the rewards, which makes investing in the right ZIP code crucial. To mitigate risk and earn the highest real estate returns, investors should focus assets that can maintain value even during downturns, Hovland said.
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Remember, when it comes to real estate, ZIP codes aren’t the only numbers that matter. Without a good credit score, financing a real estate investment can be difficult and costly. See where you stand and check your credit score for free at Credit.com. Here are the top ZIP codes with the highest real estate returns.
Submarket: North Indianapolis
Metro Area: Indianapolis
Annualized Total Return: 5.4%
Submarket: North Hollywood, California
Metro Area: Los Angeles
Annualized Total Return: 5.4%
Submarket: Edmond, Oklahoma
Metro Area: Oklahoma City
Annualized Total Return: 5.4%
Submarket: Maryland Heights, Missouri
Metro Area: St. Louis
Annualized Total Return: 5.5%
Submarket: North Scottsdale, Arizona
Metro Area: Phoenix
Annualized Total Return: 5.5%
Submarket: Clear Lake City, Texas
Metro Area: Houston
Annualized Total Return: 5.6%
Submarket: Flower Mound, Texas
Metro Area: Dallas
Annualized Total Return: 5.6%
Submarket: Chagrin Falls, Ohio
Metro Area: Cleaveland
Annualized Total Return: 5.6%
Submarket: Oldsmar, Florida
Metro Area: Tampa
Annualized Total Return: 5.7%
Submarket: King City, Oregon
Metro Area: Portland, Oregon
Annualized Total Return: 5.8%
Submarket: Snellville, Georgia
Metro Area: Atlanta
Annualized Total Return: 5.8%
Submarket: Forestville/Cherry Grove, Ohio
Metro Area: Cincinnati
Annualized Total Return: 5.9%
Submarket: Des Plaines, Illinois
Metro Area: Chicago
Annualized Total Return: 6%
Submarket: Overland Park, Kansas
Metro Area: Kansas City
Annualized Total Return: 6.2%
Submarket: Fairview, Tennessee
Metro Area: Nashville
Annualized Total Return: 6.5%
Submarket: Weston, Florida
Metro Area: Fort Lauderdale, Florida
Annualized Total Return: 6.6%
Submarket: Palmetto Bay, Florida
Metro Area: Miami
Annualized Total Return: 6.8%
Submarket: West Bloomfield Township, Michigan
Metro Area: Detroit
Annualized Total Return: 6.9%
Submarket: Gladwyne, Pennsylvania
Metro Area: Philadelphia
Annualized Total Return: 6.9%
Submarket: Hamptons at Boca Raton, Florida
Metro Area: West Palm Beach
Annualized Total Return: 8.1%
Read more: Best and worst home insurance companies
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This article originally appeared on Credit.com.
This post was last modified on August 25, 2017 7:24 am
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