Buying a rental property is cheaper in the winter — here are the 26 best places to make money as a landlord right now

  • Home prices in the US are lowest during the winter months each year.
  • Real estate investors pay 6.6% less per square foot for the same rental property during the winter as they do during the spring and summer.
  • In some of the country's biggest metros, a winter buy could increase your overall return on investment by as much as 36%.

 

Winter is the best time to buy a home — and that includes scooping up a rental property. 

HomeUnion, an online real estate and investment firm, recently released a list of the best places in America to score a bargain on a rental property this season. They compared return on investment figures for homes purchased during winter and homes purchased during summer in the country's biggest metro areas.

"Median home prices drop substantially during the colder months, while rent losses remain marginal for landlords," said Steve Hovland, director of research for HomeUnion. "On average, investors can acquire higher-yielding properties in cold-weather markets like Omaha, Nebraska, Buffalo, and Chicago, as well as some Sun Belt markets."

To determine how much a winter buyer saves in each market, HomeUnion looked at all single-family housing sales over $30,000 that occurred in October and November 2017, and compared them to May and June 2017.

HomeUnion then calculated the capitalization rate (or "cap rate") — the return on investment after operating costs — for each market, and subsequently, the percentage difference between the cap rate in winter months and summer months.

Below, we've highlighted the 26 cities where the cap rate increased by more than 10% when an investor purchased a rental property in the winter rather than the summer.

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26 best places to make money as a landlord
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26 best places to make money as a landlord

26. Rochester, New York

Increase in annual investment return: 10.32%

Median home sale price (winter): $120,000

Median home sale price (summer): $138,802

Savings on home purchase: 14%

25. Fort Lauderdale, Florida

Increase in annual investment return: 10.53%

Median home sale price (winter): $210,000

Median home sale price (summer): $230,000

Savings on home purchase: 9%

24. San Jose, California

Increase in annual investment return: 10.74%

Median home sale price (winter): $823,500

Median home sale price (summer): $950,000

Savings on home purchase: 13%

23. Cleveland, Ohio

Increase in annual investment return: 12.25%

Median home sale price (winter): $69,950

Median home sale price (summer): $77,500

Savings on home purchase: 10%

22. Dallas, Texas

Increase in annual investment return: 12.37%

Median home sale price (winter): $166,950

Median home sale price (summer): $201,875

Savings on home purchase: 17%

21. Detroit, Michigan 

Increase in annual investment return: 12.47%

Median home sale price (winter): $132,000

Median home sale price (summer): $165,000

Savings on home purchase: 20%

20. Providence, Rhode Island

Increase in annual investment return: 12.52%

Median home sale price (winter): $200,347

Median home sale price (summer): $230,000

Savings on home purchase: 13%

19. St. Louis

Increase in annual investment return: 12.82%

Median home sale price (winter): $91,125

Median home sale price (summer): $110,000

Savings on home purchase: 17%


 

17. (TIE) Knoxville, Tennessee

Increase in annual investment return: 12.86%

Median home sale price (winter): $85,550

Median home sale price (summer): $94,500

Savings on home purchase: 9%

17. (TIE) Kansas City, Missouri

Increase in annual investment return: 12.86%

Median home sale price (winter): $100,000

Median home sale price (summer): $124,900

Savings on home purchase: 20%

16. Charlotte, North Carolina

Increase in annual investment return: 13.68%

Median home sale price (winter): $127,000

Median home sale price (summer): $155,000

Savings on home purchase: 18%

15. Washington, DC

Increase in annual investment return: 14.22%

Median home sale price (winter): $265,000

Median home sale price (summer): $349,900

Savings on home purchase: 24%

14. Boston, Massachusetts

Increase in annual investment return: 14.54%

Median home sale price (winter): $290,000

Median home sale price (summer): $330,000

Savings on home purchase: 12%

13. Atlanta, Georgia 

Increase in annual investment return: 14.62%

Median home sale price (winter): $115,000

Median home sale price (summer): $135,000

Savings on home purchase: 15%

12. New York, New York

Increase in annual investment return: 14.88%

Median home sale price (winter): $309,000

Median home sale price (summer): $405,733

Savings on home purchase: 24%

11. Minneapolis, Minnesota 

Increase in annual investment return: 16.08%

Median home sale price (winter): $163,823

Median home sale price (summer): $205,000

Savings on home purchase: 20%

10. San Francisco, California

Increase in annual investment return: 16.55%

Median home sale price (winter): $1,037,500

Median home sale price (summer): $1,285,000

Savings on home purchase: 19%

9. Seattle, Washington

Increase in annual investment return: 17.81%

Median home sale price (winter): $389,500

Median home sale price (summer): $517,000

Savings on home purchase: 25%

8. Grand Rapids, Michigan

Increase in annual investment return: 18.35%

Median home sale price (winter): $110,000

Median home sale price (summer): $140,000

Savings on home purchase: 21%

7. Columbus, Ohio

Increase in annual investment return: 18.61%

Median home sale price (winter): $131,000

Median home sale price (summer): $175,000

Savings on home purchase: 25%

6. Hartford, Connecticut

Increase in annual investment return: 18.73%

Median home sale price (winter): $153,000

Median home sale price (summer): $205,450

Savings on home purchase: 26%

5. Philadelphia, Pennsylvania 

Increase in annual investment return: 20.93%

Median home sale price (winter): $123,000

Median home sale price (summer): $150,000

Savings on home purchase: 18%

4. Chicago, Illinois 

Increase in annual investment return: 21.19%

Median home sale price (winter): $185,000

Median home sale price (summer): $250,000

Savings on home purchase: 26%

4. Cincinnati, Ohio

Increase in annual investment return: 23.76%

Median home sale price (winter): $85,500

Median home sale price (summer): $110,203

Savings on home purchase: 22%

2. Buffalo, New York

Increase in annual investment return: 28.10%

Median home sale price (winter): $119,900

Median home sale price (summer): $150,000

Savings on home purchase: 20%

1. Omaha, Nebraska

Increase in annual investment return: 36.12%

Median home sale price (winter): $78,112

Median home sale price (summer): $115,000

Savings on home purchase: 32%

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SEE ALSO: Here's where home prices could take the biggest hit thanks to tax reform

DON'T MISS: The 11 worst cities for homeowners after the GOP tax bill goes into effect

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