The winter off-peak period can be the best time of the year to acquire single-family rentals, according to a new study released by HomeUnion, an online real estate investment and management firm.
The average cap rate for SFRs during the winter months was 6 percent last year compared to 5.3 percent in the summer, the report shows. What’s more, investors pay 7.2 percent less per square foot for the same property during the winter as they do during the spring and summer buying season.
“Based on seasonal cap rate fluctuations, our study conclusively found that early winter is the best time to acquire SFRs,” says Steve Hovland, director of research for HomeUnion. “In many metros, median home prices drop substantially during the colder months, while rent losses were marginal for investors. Winter is the perfect time to acquire solidly performing SFR assets in cold-weather metros such as Pittsburgh and Chicago, as well as int he Sun Belt markets of Jacksonville, Tampa, and Greenville, S.C. These markets all ranked among our top 20 metros.”
HomeUnion ranked the following markets as best bets for seasonal bargains for investors:
- Pittsburgh: $69,000 (2016 winter median SFR) vs. $87,000 (summer median SFR)
- San Francisco: $920,000 vs. $1.2 million
- Milwaukee: $70,000 vs. $92,000
- Philadelphia: $127,000 vs. $161,300
- Chicago: $128,000 vs. $225,000
- Columbus: $110,000 vs. $149,800
- Boston: $247,000 vs. $300,000
- Cincinnati: $74,900 vs. $115,000
- Cleveland: $62,000 vs. $80,100
- Greenville, S.C.: $86,250 vs. $140,000
Source: HomeUnion
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