If you are a bottom-fishing investor, you may want to usher in the New Year in Las Vegas, NV, but not because it's a big party town.
Sin City , along with Stockton, Modesto and Vallejo, CA and Detroit, MI are among the best bets for real estate markets best suited for rental investors.
Yes, specifically because economic conditions in those towns remain among the worst in the nation.
"When you're looking for investment opportunity , you're looking for problems that still look bad," said Ingo Winzer, president and founder of Local Market Monitor.
Local Market Monitor and HomeVestors of America Inc., (AKA: "We Buy Ugly Houses") compile a quarterly list ranking markets based on future returns on homes purchased as rental properties.
"We encourage investors to look hard at the markets at the top of our Best Markets rankings," explained David Hicks, co-president of HomeVestors.
"As home prices in those markets begin to rise though, opportunities for short term gains tend to diminish," added Hicks.
Hicks said potential home owners and investors are waiting until the market bottoms out, but when pent up demand is released, prices will begin to rise, perhaps faster than expected.
Rounding out the Top 10 best investment towns were Visalia, CA; Port St. Lucie, FL; Reno, NV and Warren and Flint, MI.
"When things start looking better, you won't get the same low prices. That's basically the reason our list of best opportunities has changed: things are looking less bleak in a lot of places and sellers are holding out for higher prices than they would have a year ago," Hicks said.
Local Market Monitor points out that of the eight that dropped out of the top ten, Atlanta was the biggest and dropped the furthest - from the ninth spot in the first quarter listing to 106 in the fourth.
Other major markets that dropped out of the top 10 included Orlando, FL (from 3 to 16) and Phoenix, AZ (from 8 to 31).
Smaller markets (under one million in population) that are now less than opportune investment towns that fell from the top ten were Daytona Beach, FL (from 4 to 20); Bakersfield, CA (from 5 to 11); Fort Myers, FL (from 6 to 15); and Boise City, ID (from 10 to 33).
"A year ago, home prices in Boise City had fallen 13 percent from the previous year - pretty bad," noted Winzer.
"This year they're up seven percent. In Orlando, they had fallen 10 percent, this year they're flat. In Phoenix, prices had fallen 12 percent, but now they're up 10 percent. Initial prices aren't everything if you're a long-term investor. Short term gains are part of the opportunity as well," Winzer noted.