Hit the Target


by Ingo Winzer


f you're thinking of invest- ing in a rental this year, it's

of renters in each local market. As a rule of thumb, it runs from the aver- age rent in a market to about 25 per- cent higher. If you invest in a property where the rent you need falls within the Target Rent Range, you'll never be short of renters, you'll never need to offer discounts, and you'll always get the return you expected. Granted, you may not find prop- erties at the right price in some markets. So be it; don't invest there. That's why San Francisco, New York and Boston aren't on our “baker's dozen of big markets.” (The list is just according to size, there's no right or wrong answer.) You'll need to do more work to find a property that fits best, especially in

markets like L.A. and Miami where home prices are more than 20 per- cent over the "income" price, but once you make your investment, you'll be

difficult to ignore the news about soaring home prices - especially in those markets where rentals are most needed. How can an investor operate in a place like San Francis- co, where the average home price is already over a million dollars? How many people can afford the rent you would need? And who will want to, once the crash comes? Luckily, there's a safer way to invest in rentals in almost any mar- ket, which has nothing to do with soaring home prices — investing to the Target Rent Range. The Target Rent Range is where you'll find the highest concentration

able to sleep soundly at night. Our Investors Metro Monitor

shows you the risks and opportuni- ties in 200 markets across the coun- try, at •

IngoWinzer is president of Local Market Monitor, which analyzes conditions in 300 U.S. markets, using such economic data as home values and growth in employment and population. Winzer, who has analyzed

real estate markets for more than 20 years, was a founder and executive vice president of First Research, an industry research company that was acquired by Dun & Bradstreet in March 2007. He is a graduate of MIT and holds an MBA in finance from Boston Univer- sity. Winzer resides in Cambridge, Mass.

110 | think realty magazine :: may / june 2019

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