Rental properties show promise in Tampa Bay

Real estate investment has been a sore subject for Tampa Bay, but a recent study shows the opportunity is in rentals.

Local Market Monitor, a North Carolina-based firm that studies real estate trends, ranked the Tampa metro area ninth out of 100 regions in its list of best markets for rental property investment.

Caroline Beggs, chief operating officer of Local Market Monitor, says the key statistic behind the ranking is job growth, which has been positive in the area. Beggs says the region outpaced the national average by double, with a 2.4% increase in employment in 2011.

David Hicks, co-director of HomeVestors of America Inc., says investors are eyeing Tampa Bay because of lackluster housing numbers. Though this seems contradictory, he says the market is so depressed that long-term risk is low. “Things can't get much worse,” he explains.

Hicks adds that migration of retirees to Florida will increase as the economy improves. And with stricter guidelines on home loans, they will likely be renters.

The increasing demand for single-family rental properties will drive rents up, producing higher-than-average returns for investors. Low risk? Check. Large returns? Check.

“We think there's a real opportunity in this market in the coming years,” Hicks says. “It's certainly the first place I'd look if I was investing in these properties.”