A group of companies has emerged to offer ways for real estate investors on the coasts to buy, renovate, and manage properties in markets that have lower home prices, according to Reuters' David Randall.
The companies are pulling in money from clients in costly coastal markets that is boosting demand and home prices in the lower-cost cities they target. “In the last 12 months, I’ve seen more cash buyers from California than I’ve ever seen in my career, and I’ve been doing this for 25 years,” said Anne Callahan, a real estate agent in Cleveland, Ohio, where the average rent for a single-family home is up 4.2 percent over the last year, according to Zillow Research.
The attraction to low priced markets is obvious.
In suburban Atlanta, the average landlord of a single-family home reaps a 25.8 percent gross annual yield, a measure of annual rent divided by median sales price, not including other potential costs, according to real estate data firm RealtyTrac. That compares with just a 3.4 percent yield in the San Francisco Bay Area, where the median home price was $675,000 in August, according to data provider CoreLogic.