January 24, 2020
A step-by-step guide to finding cities with the best ROI for SFR portfolios
Here’s the data you need to pick the locations that will pay off in today’s market.

Building large portfolios of single-family rental (SFR) homes may be relatively new, but the principles are much the same as real estate investing throughout the ages. The three most important factors, as the saying goes, are location, location and location.

With 384 metropolitan areas and 39,044 municipalities in the United States, picking locations for an SFR portfolio can be a daunting task. (Most investors start by concentrating portfolios in a handful of markets—or even just one.)

And while there are published rankings of the hottest investment markets today—Charlotte, Orlando, and Las Vegas top many—for sophisticated investors those lists are no more useful than a table of hot stocks on a financial website. At Entera, we work with some of the savviest players in the SFR market and understand how to take a disciplined approach to choose ideal markets.

First, identify your investment objectives through careful self examination. Questions to ask might include:

Second, gather information that will help screen metropolitan areas, municipalities and individual neighborhoods to find those that best fit into your strategy. This typically involves pulling together economic data, property records, real estate listings, school rankings and much more from dozens of sources. You can try to find all this information on your own or find a vendor that has already collected and organized the relevant data.  At Entera, for example, our database includes thousands of fields from more than 65 sources.With this information assembled, here are three key factors to consider when refining your list of investment markets.

Rent yield

The first way to categorize cities or neighborhoods is by average rental yields, i.e., average rent for the location divided by average sale price. On first glance, higher yields are more attractive. Look beyond the average gross yields, however, by looking for data that suggests above average operating costs:

Some investors, moreover, are looking beyond cash-on-cash return, the traditional focus in real estate. They are accepting low or even negative cash flow in return for the opportunity to profit from the surging residential real estate market in places like Northern California.

Housing supply and demand trends

Housing is a long-term asset and you’re looking for locations where rent, home prices or both will increase over time. Conversely, you may not want to buy into an area about to be glutted with new houses So look for indicators of the forces behind the supply and demand for single-family homes.  For example:

Neighborhood appeal

People have many different reasons for coveting certain neighborhoods and homes. So be creative as you assemble indicators that show the best locations to buy and rent houses for target customers. Factors to consider include:

One last point. Don’t forget to supplement quantitative information with qualitative insight. If you don’t have an advisor with local experience, you’ll need to contact local real estate agents, economic development officials and other sources. They can help explain economic trends and neighborhood differences that don’t show up in the numbers. Once you’ve picked your cities and neighborhoods, you can then move on to finding specific properties to bid on. More on that to come.

Our AI-powered investment platform modernizes the way professional investors find, buy and operate real estate. Entera enables you to play bigger and execute against your investment goals in ways previously not possible.





What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.