HomeVestors and Local Market Monitor Ranking Reveals Best Markets to Invest in Rental Property

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– Projected National Average Return Ticks Up from Q2 to Q3
– Ranking Shows Expected Performance of Single-Family Homes Maintained as Rental Properties
– No Other National Ranking Like This

THIRD QUARTER  2011 UPDATE – September 19, 2011 – (RealEstateRama) — HomeVestors of America, Inc., known as the “We Buy Ugly Houses®” company, and Local Market Monitor, Inc.,  a leading forecaster of real estate markets, today released the Third Quarter  2011 update of the “HomeVestors-Local Market Monitor Best Markets to Invest in  Rental Property” ranking that was initially published in July.  The ranking is intended to help inform real estate investors of  current rental property investment  opportunities based on their potential future relative returns.  The ranking is updated quarterly.

HomeVestors and  Local Market Monitor estimate that approximately 14% of single-family homes in  the U.S. are maintained as rental properties.   The companies believe there is no other regularly produced, reliable  national ranking of the expected future performance of homes maintained as  rental properties, which makes this ranking particularly useful to prospective  investors.

Top 20 Markets, Commentary and Top 100 Markets Ranked

The “HomeVestors-Local Market  Monitor Best Markets to Invest in Rental Property” ranking forecasts the  expected performance of rental real estate properties, specifically  single-family homes maintained as rental properties.  The rankings show the extra return, or  risk-return premium, that an investor must demand from rental property in a  local market.  The risk-return premium  can be added to the regular capitalization rate to produce a risk-adjusted cap  rate at full occupancy for a local market.   Said another way, this is the same as the potential Future Relative Return.  The ranking is calculated based on three-year  forecasts of home prices (reflecting underlying home-price appreciation  potential) and gross rents (as a proxy for potential investor cash flow).

For Q3, the national average  risk-return premium is 5.4%.  For Q2, it  was 5.3%.

HomeVestors-Local    Market Monitor Best Markets to Invest in
Rental Property – Top 20 Markets


Market


Q3 Ranking


Q2 Ranking


Change Since Q2

Risk-Return Premium (+/-) Relative to    5.4% National Average

Las    Vegas, Nevada 1 1 NA +5.0%    (above national average)
Detroit,    Michigan 2 2 NA +4.3%
Orlando,    Florida 3 4 +1 +3.1%
Warren,    Michigan 4 3 -1 +3.1%
Ft.    Lauderdale, Florida 5 8 +3 +2.9%
Bakersfield,    California 6 5 -1 +2.7%
Tampa-St.    Petersburg, Fla. 7 6 -1 +2.6%
Phoenix,    Arizona 8 7 -1 +2.5%
Stockton,    California 9 10 +1 +2.4%
West    Palm Beach, Florida 10 18 +8 +2.2%
Atlanta,    Georgia 11 16 +5 +2.1%
Bradenton-Sarasota,    Florida 12 11 -1 +2.1%
Rochester,    New York 13 9 -4 +2.0%
Fort    Worth, Texas 14 12 -2 +1.9%
Dallas,    Texas 15 13 -2 +1.8%
Syracuse,    New York 16 14 -2 +1.7%
Jacksonville,    Florida 17 20 +3 +1.7%
Fresno,    California 18 17 -1 +1.5%
Tucson,    Arizona 19 21 +2 +1.5%
Memphis,    Tennessee 20 27 +7 +1.4%

Commenting on the local  markets and the ranking overall, Ingo Winzer, president and founder of Local  Market Monitor, Inc., said:

“A sharper than expected fall  in recent home prices, which are down almost 5% in the last year, has led us to  lower expectations for future prices.  At  the same time, however, higher inflation and slow but steady job growth should boost  future rents.  The desirability of  investing in rental properties is therefore positive.  In fact, the national average risk-return  premium has ticked up ever so slightly from 5.3% to 5.4% since last quarter.”

“The Future Relative Returns for  large markets suggest that Las Vegas and Detroit are still very risky, highly  speculative markets that could have a big payoff only if the local economy  rebounds faster than we expect.  Safer  but still advantageous markets include Dallas, Fort Worth and Atlanta.  The most interesting markets are in Florida  and Arizona, where home prices have still not bottomed out but rents will  eventually be supported by renewed population growth; investors in these  markets must take a long-term view but will be rewarded if they can tolerate high  vacancies for a few years.”

David Hicks, co-president of  HomeVestors of America, Inc., added: “What we’re seeing in the marketplace  reinforces the results of the latest ranking.   Our franchises in West Palm Beach, Atlanta, Phoenix, Dallas, Fort Worth  and Tucson all report a marked increase in investor interest in rental property  opportunities.  Investors are recognizing  the potential for homes in these markets to produce above-average financial returns.”

 

HomeVestors-Local    Market Monitor Best Markets to Invest in
Rental Property – Top 100 Markets

Rank

Market

Risk-Return Premium (+/-) Relative to    5.4% National Average

1 Las    Vegas, Nevada +5.0%    (above national average)
2 Detroit,    Michigan +4.3%
3 Orlando,    Florida +3.1%
4 Warren,    Michigan +3.1%
5 Ft.    Lauderdale, Florida +2.9%
6 Bakersfield,    California +2.7%
7 Tampa-St.    Petersburg, Florida +2.6%
8 Phoenix,    Arizona +2.5%
9 Stockton,    California +2.4%
10 West    Palm Beach, Florida +2.2%
11 Atlanta,    Georgia +2.1%
12 Bradenton-Sarasota,    Florida +2.1%
13 Rochester,    New York +2.0%
14 Fort    Worth, Texas +1.9%
15 Dallas,    Texas +1.8%
16 Syracuse,    New York +1.7%
17 Jacksonville,    Florida +1.7%
18 Fresno,    California +1.5%
19 Tucson,    Arizona +1.5%
20 Memphis,    Tennessee +1.4%
21 Wichita,    Kansas +1.4%
22 Riverside-San    Bernardino, California +1.3%
23 Grand    Rapids, Michigan +1.3%
24 Miami,    Florida +1.3%
25 Dayton,    Ohio +1.3%
26 Omaha,    Nebraska +1.2%
27 Houston,    Texas +1.2%
28 Sacramento,    California +1.2%
29 Tulsa,    Oklahoma +1.1%
30 Akron,    Ohio +1.0%
31 El    Paso, Texas +1.0%
32 Minneapolis-St.    Paul, Minnesota +1.0%
33 Austin,    Texas +1.0%
34 Cleveland,    Ohio +1.0%
35 Toledo,    Ohio +0.9%
36 Colorado    Springs, Colorado +0.8%
37 Kansas    City, Missouri +0.8%
38 Oklahoma    City, Oklahoma +0.8%
39 San    Antonio, Texas +0.7%
40 Buffalo,    New York +0.7%
41 Gary,    Indiana +0.7%
42 Camden,    New Jersey +0.6%
43 Columbia,    South Carolina +0.6%
44 Little    Rock, Arkansas +0.6%
45 New    Haven, Connecticut +0.6%
46 Edison,    New Jersey +0.5%
47 Columbus,    Ohio +0.5%
48 McAllen,    Texas +0.5%
49 Chicago,    Illinois +0.4%
50 St.    Louis, Missouri +0.4%
51 Albuquerque,    New Mexico +0.3%
52 Richmond,    Virginia +0.3%
53 Indianapolis,    Indiana +0.3%
54 Poughkeepsie,    New York +0.3%
55 Tacoma,    Washington +0.2%
56 Cincinnati,    Ohio +0.2%
57 Wilmington,    Delaware +0.2%
58 Denver,    Colorado +0.2%
59 Nashville,    Tennessee +0.2%
60 Greensboro,    North Carolina +0.2%
61 Albany,    New York +0.2%
62 Portland,    Oregon +0.2%
63 Allentown,    Pennsylvania +0.1%
64 Hartford,    Connecticut +0.1%
65 Pittsburgh,    Pennsylvania +0.1%
66 Baton    Rouge, Louisiana +0.1%
67 Raleigh,    North Carolina 0.0%    (equivalent to national average of 5.4%)
68 Charlotte,    North Carolina 0.0%    (equivalent to national average of 5.4%)
69 Springfield,    Massachusetts -0.1%    (below national average)
70 Bridgeport,    Connecticut -0.1%
71 Virginia    Beach, Virginia -0.1%
72 Knoxville,    Tennessee -0.2%
73 Louisville,    Kentucky -0.2%
74 Birmingham,    Alabama -0.2%
75 Washington,    DC -0.2%
76 Philadelphia,    Pennsylvania -0.2%
77 Milwaukee,    Wisconsin -0.2%
78 New    Orleans, Louisiana -0.2%
79 Seattle,    Washington -0.3%
80 Salt    Lake City, Utah -0.4%
81 Baltimore,    Maryland -0.4%
82 San    Diego, California -0.4%
83 Oxnard,    California -0.5%
84 Boston,    Massachusetts -0.6%
85 Greenville,    South Carolina -0.6%
86 Worcester,    Massachusetts -0.6%
87 Charleston,    South Carolina -0.7%
88 Oakland,    California -0.7%
89 Lake    County, Illinois -0.8%
90 Providence,    Rhode Island -1.0%
91 Nassau-Suffolk,    New York -1.0%
92 Anaheim,    California -1.2%
93 Los    Angeles, California -1.3%
94 Peabody,    Massachusetts -1.4%
95 San    Jose, California -1.5%
96 Honolulu,    Hawaii -1.5%
97 Newark,    New Jersey -1.6%
98 Bethesda,    Maryland -1.7%
99 New    York City, New York -1.9%
100 San    Francisco, California -2.4%

 About HomeVestors

Dallas-based HomeVestors of  America, Inc., the #1 buyer of houses in the U.S., was incorporated and began  franchising in 1996.  The first real estate franchise investment  company, HomeVestors trains and supports its independently owned and operated franchisees  that specialize in buying older homes in need of repair, and updating or rehabbing  them.  Most commonly known as the “We Buy Ugly Houses” company,  HomeVestors strives to make a positive impact in each community.  In 2010, for the fifth consecutive year,  HomeVestors was among the prestigious Franchise Business Review’s “Top 50  Franchises,” a distinction awarded to franchisors with the highest level of  franchisee satisfaction.  For more  information visit www.HomeVestors.com.  HomeVestors has franchise opportunities  available in 97 of the 100 markets listed on the current ranking.  To learn more about the HomeVestors  franchise, visit www.HomeVestorsFranchise.com.

About Local Market Monitor

Local Market Monitor, the  premier real estate forecasting solution, offers investors in homes and home  mortgages the local market risk intelligence they need to make informed  decisions.  Using a proprietary formula  called the Equilibrium Home Price, Local Market Monitor determines if markets  are currently over or under valued, equipping users with a long-term risk and  investment perspective.  Covering over 300 local markets, Local Market  Monitor also presents key investors with a 12, 24 and 36-month home price  forecast.  The solution includes sorting  capabilities allowing subscribers to view and compare real estate markets along  various metrics, including an Investment Suitability Ratings to  identify opportunities based on individual investing goals.  To learn more  visit www.LocalMarketMonitor.com or call 800-881-8653.

Media Contact

Cary  Brazeman
310-205-3590
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THIRD QUARTER 2011 UPDATE – September 19, 2011 – (RealEstateRama) — HomeVestors of America, Inc., known as the “We Buy Ugly Houses®” company, and Local Market Monitor, Inc., a leading forecaster of real estate markets, today released the Third Quarter 2011 update of the “HomeVestors-Local Market Monitor Best Markets to Invest in Rental Property” ranking that was initially published in July. The ranking is intended to help inform real estate investors of current rental property investment opportunities based on their potential future relative returns. The ranking is updated quarterly.

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