October 30, 2014

Estimating Rental Investment Returns per Major Metropolitain Areas

The kind of return you can get from a rental property varies a lot based on the local real estate market.   I figured I could use average rents and median home values to give a crude estimate of the approximate rental returns for a given area.  This isn't precise though since the median home will have different characteristics than the average rental.   The home is likely to be larger and have more amenities, etc than a average rental.   But for my purposes of giving a rough gauge of the returns for a rental market, I think it is good enough.


To give a single data point on how the table below might compare to actual property values and rents I decided to look at Vegas.  I pulled up Zillow and searched for houses in Vegas from $100-$125k and found a house for $105k with 3 bed/3bath.  Zillow estimates the rent would be $1020.    I then checked Craigslist and searched for 3 bed rentals under $1200 and found a couple houses with 3 beds for $1000 and $1100.    These figures compare to the median home values of $124k and average rent of $957 in the table.  Also of course what I'm looking at on Zillow and Craigslist is in 2014 versus the data below in the tables being from 2011. 

The table below lists the median home values in $1000, monthly rental costs and then the return rate calculated based on simply 12 months of rent / median house costs.   All the figures below are from 2011 as thats the latest I found all the data available.



Metro Home Rent Return
Atlanta-Sandy Springs-Marietta, GA 98.6 914 11.1%
Austin-Round Rock, TX 193.1 930 5.8%
Baltimore-Towson, MD 230.0 1073 5.6%
Birmingham-Hoover, AL 139.8 753 6.5%
Boston-Cambridge-Quincy, MA-NH 346.2 1163 4.0%
Buffalo-Niagara Falls, NY 119.2 682 6.9%
Charlotte-Gastonia-Concord, NC-SC 148.9 820 6.6%
Chicago-Naperville-Joliet, IL 176.5 928 6.3%
Cincinnati-Middletown, OH-KY-IN 122.3 711 7.0%
Cleveland-Elyria-Mentor, OH 105.1 712 8.1%
Columbus, OH 123.9 776 7.5%
Dallas-Fort Worth-Arlington, TX 148.9 863 7.0%
Denver-Aurora, CO 231.4 920 4.8%
Detroit-Warren-Livonia, MI 53.8 805 18.0%
Hartford-West Hartford-East Hartford, CT 227.6 962 5.1%
Houston-Baytown-Sugar Land, TX 155.7 849 6.5%
Indianapolis, IN 123.9 764 7.4%
Jacksonville, FL 123.6 940 9.1%
Kansas City, MO-KS 133.2 798 7.2%
Las Vegas-Paradise, NV 124.7 957 9.2%
Los Angeles-Long Beach-Santa Ana, CA  307.7 1214 4.7%
Louisville, KY-IN 130.4 696 6.4%
Memphis, TN-MS-AR 112.3 805 8.6%
Miami-Fort Lauderdale-Miami Beach, FL 181.1 1078 7.1%
Milwaukee-Waukesha-West Allis, WI 185.2 785 5.1%
Minneapolis-St. Paul-Bloomington, MN-WI 154.7 858 6.7%
Nashville-Davidson--Murfreesboro, TN 151.9 800 6.3%
New Orleans-Metairie-Kenner, LA 153.0 886 6.9%
New York-Northern New Jersey-Long Island, NY-NJ-PA 378.7 1187 3.8%
Oklahoma City, OK 141.6 731 6.2%
Orlando, FL 124.9 970 9.3%
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 210.1 957 5.5%
Phoenix-Mesa-Scottsdale, AZ 115.5 893 9.3%
Portland-Vancouver-Beaverton, OR-WA 219.5 906 5.0%
Providence-New Bedford-Fall River, RI-MA 217.2 849 4.7%
Raleigh-Cary, NC 185.2 828 5.4%
Richmond, VA 187.1 925 5.9%
Riverside-San Bernardino-Ontario, CA 172.3 1076 7.5%
Sacramento--Arden-Arcade--Roseville, CA 166.1 1004 7.3%
Saint Louis, MO-IL 121.8 776 7.6%
Salt Lake City, UT  182.2 859 5.7%
San Antonio, TX 152.5 907 7.1%
San Diego-Carlsbad-San Marcos, CA  370.3 1237 4.0%
San Francisco-Oakland-Fremont, CA  483.4 1345 3.3%
San Jose-Sunnyvale-Santa Clara, CA 570.0 1460 3.1%
Seattle-Tacoma-Bellevue, WA 285.0 1037 4.4%
Tampa-St. Petersburg-Clearwater, FL 127.8 906 8.5%
Virginia Beach-Norfolk-Newport News, VA-NC 182.9 1053 6.9%
Washington-Arlington-Alexandria, DC-VA-MD-WV 325.4 1391 5.1%


The markets with the 10 best returns :

Metro Home Rent Return
Detroit-Warren-Livonia, MI 53.8 805 18.0%
Atlanta-Sandy Springs-Marietta, GA 98.6 914 11.1%
Orlando, FL 124.9 970 9.3%
Phoenix-Mesa-Scottsdale, AZ 115.5 893 9.3%
Las Vegas-Paradise, NV 124.7 957 9.2%
Jacksonville, FL 123.6 940 9.1%
Memphis, TN-MS-AR 112.3 805 8.6%
Tampa-St. Petersburg-Clearwater, FL 127.8 906 8.5%
Cleveland-Elyria-Mentor, OH 105.1 712 8.1%
Saint Louis, MO-IL 121.8 776 7.6%

And the 10 worst:

Metro Home Rent Return
San Jose-Sunnyvale-Santa Clara, CA 570.0 1460 3.1%
San Francisco-Oakland-Fremont, CA  483.4 1345 3.3%
New York-Northern New Jersey-Long Island, NY-NJ-PA 378.7 1187 3.8%
San Diego-Carlsbad-San Marcos, CA  370.3 1237 4.0%
Boston-Cambridge-Quincy, MA-NH 346.2 1163 4.0%
Seattle-Tacoma-Bellevue, WA 285.0 1037 4.4%
Providence-New Bedford-Fall River, RI-MA 217.2 849 4.7%
Los Angeles-Long Beach-Santa Ana, CA  307.7 1214 4.7%
Denver-Aurora, CO 231.4 920 4.8%
Portland-Vancouver-Beaverton, OR-WA 219.5 906 5.0%


I was going to add in the property tax rates and figure the return after accounting for average property taxes.  However I can't account for the impact of homestead exemptions so that would make that calculation kind of worthless. 

This does not account for the expenses which vary as well.  
Sources of information :
Rent  rates from the Census
Median home prices from the Realtor association

--

October 28, 2014

List of Merchants for 5-20% Cashback Bonus at Shop Discover - October 2014

I previously posted a List of Merchants for 5-20% Cashback Bonus at Shop Discover early in this year, but the list has changed a little with merchants being added or removed.   This list is current as of October 24th:

5% cash back 


7 For All Mankind Kohl's.com
A Pea In The Pod Lancome
Abt.com Lands' End
Ace Hardware LeapFrog
AdvanceAutoParts Lenovo
Aeropostale Levi's
Ann Taylor LivingSocial
Apple Store LLBean
Athleta LOFT
Atlantis and More Bahamas Resorts Lord & Taylor
Avalon Waterways Lumber Liquidators
Avon Luxury Link
Backcountry.com Macy's
Banana Republic Madewell
Bass Pro Shops Marriott
Beauty.com Mattel
Bed Bath & Beyond Microsoft Store
Best Buy MooseJaw
Beyond the Rack Motherhood
Bloomingdale's Neiman Marcus
Bluefly Neiman Marcus Last Call
Bobbi Brown New York & Company
buybuy Baby Nordstrom
Carnival Cruises Norwegian Cruise Line
Carson's Oceania
CB2 Office Depot
Celebrity Cruises OfficeMax
Chadwick's Old Navy
Chefs Catalog Omaha Steaks
Chico's Orbitz
Clinique Origins
Coach Overstock.com
Cost Plus World Market Palace Resorts
Crate&Barrel Panasonic
Darphin Paper Source
Dell Consumer PCRush.com
Dell Small Business Perry Ellis
Destination Maternity Piperlime
Dillard's Princess Cruises
Dockers QVC
Dollar Rent A Car Rakuten Shopping.com
Drugstore.com Ralph Lauren
Eastbay Regent
Enterprise Royal Caribbean
Estee Lauder Saks Off 5th
Expedia Samsung
Express Sears
Fairmont Sephora
Forever 21 Smashbox
GameStop Sony
GAP Sports Authority
Globus Staples
Godiva Starbucks
Gordons Tauck
Groupon The Body Shop
Guess The Children’s Place
Guitar Center The Container Store
Hammacher Schlemmer The Land of Nod
Hanes The Limited
Hanna Andersson Things Remembered
Harbor Freight Tools Thrifty.com
Hard Rock Resorts TigerDirect.com
Harry & David Timberland
Holland America Tory Burch
Home Decorator's Toshiba
homedepot.com Travelocity
Hotels.com Tumi
Hotwire UGG
HP Home Ulta
HSN Universal Studios Resort
J.Crew Vera Bradley
J.Crew Factory Viking River Cruises
J.Jill Vistaprint
jcpenney Walgreens
Jos. A. Bank Walmart
Kiehl's White House Black Market
Kmart Zales

10% cash back


1800CONTACTS Lobster Gram
AllPosters.com Lucky Brand Jeans
Art.com MLB.com
Blair.com OnlineShoes
Brookstone petco.com
Columbia PUMA
Fandango RedEnvelope
Finish Line Rosetta Stone
Foot Locker SaksFifthAvenue
Gaiam Shari’s Berries
GNC Live Well Sharper Image
Golfsmith Shoes.com
GourmetGiftBaskets.com The North Face
Jewelry.com Under Armour
Lids

15% cash back


1-800-Baskets
1800Flowers.com
Bliss
Fannie May Candies
FTD
OvernightPrints
Restaurant.com
Teleflora
The Popcorn Factory
TurboTax
Vision Direct
Wine Enthusiast

20% cash back


H&R Block
Magazines.com
ProFlowers

--

October 26, 2014

Average Real Cost of Gas Spent Per Mile 1994 to 2010

Gas has gone up a lot in the past 10 years.   But at the same time  cars have become more efficient and due to general inflation costs have gone up in general.   If adjusting for inflation then what is the trend in spending on gasoline per mile driven given these 3 variables?   Well glad you asked, here's a chart :


The figures are in 2010 real dollars.

And in table format :



real gas /mile
1994  $   0.056
1995  $   0.058
1996  $   0.061
1997  $   0.059
1998  $   0.050
1999  $   0.054
2000  $   0.068
2001  $   0.062
2002  $   0.058
2003  $   0.064
2004  $   0.074
2005  $   0.085
2006  $   0.094
2007  $   0.096
2008  $   0.106
2009  $   0.073
2010  $   0.084

 I got the data from :
Average auto fuel economy in MPG from the DoT Bureau of Transportation Statistics Table 4-23: Average Fuel Efficiency of U.S. Light Duty Vehicle
Average gasoline prices from the EIA
Inflation data is from the CPI report Table 24
--

October 24, 2014

Best of Blogs for Week of October 24th

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

Its a few weeks old now but I really liked Mike Rowe's essay on following your passion.

MyMoneyBlog has a report on their Prosper vs. LendingClub Investor Experiment: 2 Year Update

BusinessInsider has a graphic showing The Most Expensive College Dorms In Every State

The Simple Dollar says If I Can Suggest One Financial Move to Anyone, It’s This 
tl;dr version : save for retirement

Moneybox says It Seems No One Is Rich or Happy: I Looked
--

Blog Widget by LinkWithin