Drawing from rental data from across the county, BPInsights compared rent rates over the last five years to identify the cities that have seen the greatest increases for rental investors.
There are a variety of reasons why these metros made this list including job growth, development, and population increases. While these metros have shown strong rental price growth over the last five years, past performance is not indicative of the future performance of any potential investments in these markets. As always, I advise you to do your own research to see if you want to invest there.
To help you get started, these are the top 7 U.S. metros where rental prices have increased the most in the past five years.
7. Phoenix, Arizona
Despite Phoenix being among the sunniest metros in our listings, renters don't seem to mind. In 2015, the average rent in Phoenix was $1,049. However, over the past five years, the average monthly rent increased to $1,558, up $508. Year-over-year this means rents increased an average of 8.2%.
6. Las Vegas, Nevada
Now if you placed a bet on the next metro, you would have been a winner if you guessed: Las Vegas. Rents in Las Vegas increased 48.9% over the past five years. In 2015, the average rent there was $1,112. By 2020, it rose to $1,655. This is an 8.3% compounded annual growth rate.
5. Atlanta, Georgia
Now the next metro is located all the way on the East Coast in Atlanta. Rents rose 51.3% from 2015 to 2020. The average monthly rent was $1,288 in 2015 and increased to $1,949 by 2020. The compounded annual growth rate is 8.6%.
4. Arlington, Texas
As for the number four U.S. metro, it's Arlington. Rents there increased 53% since 2015. In 2015, the average rent was $894. By 2020, it was $1,368. This rent increase is equivalent to an 8.9% compounded growth rate.
3. Sacramento, California
Heading back to the West Coast, the number three U.S. metro is Sacramento. Sacramento saw a 53.4% increase in rent growth in the last five years. The average monthly rent was $1,066 in 2015 and rose to $1,636 in 2020. This is an 8.9% compounded annual growth rate.
2. Colorado Springs, Colorado
Colorado is home to the metro that came in second on the list. Colorado Springs saw a 55.4% increase in average monthly rent from 2015 to 2020. Monthly rents were $1,074 in 2015. As of 2020, the average monthly rent is $1,600. The compounded annual growth rate is 9.2%.
1. Saint Petersburg, Florida
Finally, at number one, Saint Petersburg, topped the list with a 63.8% average rent growth over the past five years. In 2015, the average rent was $1,199. In 2020, the average rent cost a whopping $765 more at $1,964. St. Petersburg is the only U.S. metro that made the list that had a compounded annual growth rate of more than 10%, at 10.4%.
Disclaimer: The views and opinions expressed in this blog are provided for informational purposes only and should not be construed to make or consider any investment or course of action.