Individual real estate investors score big in blue-collar markets

I’ve been saying this for years: If you want to build a profitable portfolio of investment properties, avoid high-price homes in upscale markets. Instead, go for older single-family homes in working class, blue-collar neighborhoods. And RealtyTrac recently confirmed my philosophy.

The data firm found that the highest yields for single-family homes can be found in secondary and tertiary neighborhoods in secondary and tertiary markets. These somewhat older homes in older neighborhoods are benefiting from rent growth and strong demand for rental housing. And they are far away from the places where institutional investors have bought thousands of rental homes.

According to RealtyTrac, in some of those blue-collar markets the average home price is well under $50,000 and average rents are significantly higher than $1,000 a month, adding up to annual rental yields of over 30 percent. 

You can read more about RealtyTrac’s findings by clicking here.