The latest report from RentRange, a known provider of Rental Market Intelligence, reveals the top 25 cities in the U.S. which had shown huge increase in home rental prices.
The ranking involved those cities belonging in the Metropolitan Statistical Areas wherein rental prices of single-family homes had been observed for the third quarter report of 2015 and then compared with the report that was released in the same quarter of 2014.
The report showed that out of all the 25 ranked cities, those which are located in the South and Pacific had the steepest climb up in home rental prices as compared to the cities found in the Northeast and Midwest.
"The biggest increases were in the areas where the [housing] market was most depressed," said Wally Charnoff, CEO at RentRange.
Topping the list is Cape Coral-Fort Myers, Florida where the average rent increase went almost 24 percent higher during the third quarter as compared to the same quarter in 2014. This is followed by Sacramento where rents have gone up by almost 18 percent.
In general, California and Florida accounted for seven out of the top 10 markets that are included in the list. However, the yields they have generated are not as high as the ones earned by the markets that come from the Central U.S. and the Midwest. In Alabama alone, a yield of almost 15 percent was earned based on the latest report.
"We continue to see substantial opportunity in real estate investing, but strengthening real estate markets in many regions require investors to be more informed before buying an investment property and rehabilitating it in order to achieve their desired return," said Charnoff. "While, not surprisingly, California and Florida are experiencing the largest rental rate increases, further analysis reveals that markets in Alabama, Texas, Kansas and Ohio actually produce a much higher average yield."
Here are the top 25 U.S. cities that are revealed in the report along with their respective change in rent "R" and average yield "Y" for the third quarter.
1st Cape Coral-Fort Myers, FL (23.6 percent R; 9.1 percent Y)
2nd Sacramento-Arden-Arcade-Roseville, CA (17.6 percent R; 6.6 percent Y)
3rd North Port-Bradenton-Sarasota, FL (17.2 percent R; 9.7 percent Y)
4th San Francisco-Oakland-Fremont, CA (17.0 percent R; 5.6 percent Y)
5th Charleston-North Charleston, SC (16.5 percent R; 9.0 percent Y)
6th Los Angeles-Long Beach-Santa Ana, CA (16.3 percent R; 5.6 percent Y)
7th San Jose-Sunnyvale-Santa Clara, CA (16.1 percent R; 4.7 percent Y)
8th Denver-Aurora, CO (14.6 percent R; 6.7 percent Y)
9th Dallas-Fort Worth-Arlington, TX (14.0 percent R; 13.4 percent Y)
10th San Diego-Carlsbad-San Marcos, CA (13.6 percent R; 5.6 percent Y)
11th Nashville-Davidson-Murfreesboro-Franklin, TN (13.2 percent R; 9.7 percent Y)
12th Portland-Vancouver-Hillsboro, OR-WA (12.6 percent R; 6.6 percent Y)
13th Augusta-Richmond County, GA-SC (12.3 percent R; 9.8 percent Y)
14th Stockton, CA (12.1 percent R; 7.3 percent Y)
15th Seattle-Tacoma-Bellevue, WA (11.9 percent R; 6.4 percent Y)
16th Columbus, OH (11.5 percent R; 12.4 percent Y)
17th Tulsa, OK (11.3 percent R; 11.7 percent Y)
18th Kansas City, MO-KS (10.6 percent R; 12.7 percent Y)
19th Little Rock-North Little Rock-Conway, AR (10.4 percent R; N/A Y)
20th Tampa-St. Petersburg-Clearwater, FL (10.3 percent R; 11.5 percent Y)
21st Orlando-Kissimmee-Sanford, FL (10.0 percent R; 10.6 percent Y)
22nd Oxnard-Thousand Oaks-Ventura, CA (10.0 percent R; 5.7 percent Y)
23rd Birmingham-Hoover, AL (9.8 percent R; 14.8 percent Y)
24th Bakersfield-Delano, CA (9.7 percent R; 9.6 percent Y)
25th Houston-Sugar Land-Baytown, TX (9.6 percent R; 14.0 percent Y)