How to Tell a Good Rental Market From a Bad One in Arkansas

How to Tell a Good Rental Market From a Bad One in Arkansas

Finding the best places to invest in Arkansas real estate other than your hometown can sometimes be a challenge for many investors. Often this tendency to avoid the discomfort of investing in an unknown market limits our investment potential. However, an intricate part of an investment business growth is expanding boundaries because there are lots of big potential markets out there in the world.

To this end, you should be comfortable analyzing properties across Arkansas for the maximum amount of profits from your real estate investments while taking the lowest possible risk with your money. Then after locating your market, you can narrow it down to the best neighborhood within your budget and then the right property. 

Read on as we explore how to tell a good rental market from a bad one in Arkansas and how Clear Property Management LLC can help you along your journey.

Population Growth Rate

Stable markets tend to be better suited for those investors who wish to invest and hold over the long term. At the same time, those with population growth trends are very nicely suited to the BRRRR (Buy, rehab, rent, refinance, repeat) method of investing as you have long periods of time to maximize your profits. You need to know what is happening with the population because a decline indicates a decaying economy, making this one of the quickest ways to tell a good rental market from a bad one in Arkansas.

High Employment Rates

A high unemployment rate is another sign that the economy is on a downward trend, so you must also review the employment rates to tell a good rental market from a bad one in Arkansas. Additionally, check into the wage rates because higher income indicates employment demand and a tenant pool with stable income. This also goes hand in hand with higher wage earnings being able to pay more for rent each month.

More Economic Sectors

A greater diversity of economic sectors creates a cushion against economic downturns in one area affecting the economy as a whole. For example, when a market has several economic sectors such as agriculture, tourism, and manufacturing within the same market, this is another way to tell a good rental market from a bad one in Arkansas. However, if a market is limited to one or few sources of employment, and something should go wrong, then your rental income is not a stable environment.

Home Prices vs. Rental Rates

Savvy investors know that when buyers investigate a market, they typically use a formula to determine if it is currently better to rent or buy, known as the price-to-rent ratio. When this ratio falls below 15, buying is a better option. Between 16 and 20, while it may vary by property, it is typically better to rent than buy, and over 21 indicates renting is a much better option. If your potential market sits at 21 or higher, your investment will likely provide you with great returns, making this another excellent tool to determine a good rental market from a bad one in Arkansas. 

Occupancy Rates

Occupancy rates are a fantastic measurement you can use to tell a good rental market from a bad one in Arkansas. High occupancy rates indicate a strong demand for rental properties, and a steady history of this trend can further ensure that your investment is sound. A quick way to judge this is jumping on Zillow and seeing how many rentals are currently available at any given time. If there is a lot in a certain area then you may want to avoid that specific neighborhood. If not much is available then this could be a desirable area.

Landlord Friendly

Another factor in telling a good rental market from a bad one in Arkansas is the local restrictions and requirements governing the specifics of rentals. More landlord-friendly guidelines can equate to a better overall return on the investment. Your income is far more secure when a landlord has more control over their properties and tenants.

Long-Term Value

Just as with any rental property, you must focus on the best available neighborhood within your budget. Investors must still practice due diligence in researching the local crime statistics, the quality of the schools, and the perks offered to the residents by living in the community, such as parks, access to public transportation, and convenient shopping. Naturally, lower crime rates and proximity to these amenities are another way to tell a good rental market from a bad one in Arkansas. As a steadfast rule, it is better to buy the lowest-priced property in the best area, offering the most return for your investment dollar.  

It can be overwhelming to branch out into unfamiliar Arkansas markets. You can rest easy when you rely on the highly experienced team at Clear Property Management LLC; they watch out for your interests and easily recognize the red flags to avoid as we are local boots on the ground for you.

Remove the limitations to your investment goals by working with the full-service team at Clear Property Management LLC. With Clear Property Management LLC you will benefit from our expertise in every Arkansas market. The power that the reliable team at Clear Property Management LLC provides when you are in the business of real estate investments is priceless, so why not work with the best? At Clear Property Management LLC we’ve developed a network with other investors and the most sought-after industry pros who are ready to help your long-distance investment dreams come true.  Let Clear Property Management LLC help you make the right choice for your next rental market. Why not let our full-service team at Clear Property Management LLC jump into action to help you fulfill the goals of your investment strategy, keeping you on top of current market trends and helping you with any necessary adjustments to your investment plans. And don’t forget to ask about our current inventory of the best duplexes available in Arkansas. Contact Clear Property Management LLC today at 501-642-0202.

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