Whether you want to make a few extra bucks or wait for real estate prices to increase in your neighborhood before putting your home on the market, renting your apartment or house may be a smart way to bring additional income, especially if your home is in cities such as Oklahoma City or San Jose.
Oklahoma City is the best city to be a small-time landlord in the short term, which is when comparing rental income versus assumed monthly mortgage payment, according to a new research released Friday by real estate website Zillow. In that city, short-term profit amounts to $536 a month.
Related: The 9 Most Expensive U.S. Rental Markets
Here are other top real estate markets for short-term financial gain and how much mom-and-pop landlords can make monthly:
- Miami-Fort Lauderdale: $515
- Tusla, Okla.: $396
- Cincinnati: $385
- Denver: $355
- Rochester, N.Y: $349
- Tampa, Fla.: $287
- Dallas-Fort Worth, Tex.: $264
- Indianapolis: $251
- Memphis, Tenn.: $242
“When deciding if they should sell their home or rent it out, most mom-and-pop landlords are primarily concerned with whether or not they can cover their mortgage payment each month--they simply can’t absorb monthly losses like professional investors,” Zillow Chief Economist Stan Humphries, said in the press release.
“However, the greatest returns are actually in markets like San Jose and San Francisco where there are short-term monthly losses, but the long-term earned equity makes them the best markets to invest in.”
Related: 5 Ways to Save on Your Homeowner’s Insurance
Including home equity gains, tax benefits, property and income taxes, and maintenance, in addition to the difference between monthly rental income and mortgage payments after holding the property for six years, San Jose, Calif., with $8,927 in long-term profit, is the best city to be a small-time landlord.
Here are other top real estate markets for long-term financial gain and how much landlords can make, broken down on a monthly basis:
- San Francisco: $6,078
- Los Angeles: $4,328
- San Diego: $4,165
- Riverside, Calif.: $3,659
- New York: $3,179
- Boston: $3,009
- Seattle: $2,861
- Sacramento, Calif.: $2,694
- Honolulu: $2,512
Most, if not all, of the long-term profits in these markets won’t be realized until the landlord sells the property, noted Zillow.
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