Understanding the Data

Beyond home value, appreciation, and taxes, PolicyGenius focuses on some interesting data. Rent to home value ratio is the amount of rent you can collect in a year compared to the property's value. For someone looking to buy, the property's value is essentially the sale price. So for Lafayette, a home is around $185,549 and the rent to home value ratio is 5.28%, so in a year you can expect to collect $9796 in rent or $816/month in a typical situation.

It would be great if it was just as simple as dividing 100 by 5.28 to determine how many years it would take to break even on your investment, but of course there are several other factors. Assuming the property was rented 100% of the time, you'd also have to know your expenses for management, maintenance, taxes, etc. On the plus side, you can increase rent over time and the price of the investment will remain the same. Another option is cashing out early by selling and taking advantage of the 53% home value appreciation rate in Lafayette instead of waiting to for rent to be the way you recoup your investment.

Rent to income ratio is the percentage of a renter's income that goes to rent, which speaks to the affordability of rentals in the area. Lafayette's ratio is a bit above the 30% recommended limit with 31.1% of the typical renter's income going to rent. Perhaps the most difficult factor to manage with a rental is vacancy. The whims and preferences of renters along with local and national trends and events can all play into whether a particular property goes vacant. Of course the owner of a rental property must minimize vacancy in order to maximize returns on their investment. The rental vacancy rate is a modest 4.4% for Lafayette.

The Properties

You may notice the relative scarcity of condos in our list. Lafayette is not your typical vacation, recreation, or tourism area where you would expect to see more condos. Therefore, an investor is, more likely than not, going to purchase a single-family home property in Lafayette. Our #1 property is not your typical single-family home, however. It's a church! Someone with a great sense of design and skill at remodeling could turn this property into a variety of things and at a great price. 5500 square feet of space for just $129,900.

Another interesting property is #9 which is right at the median list price for the area. For $239,900 you get over 3500 square feet of nicely updated space right near the center of town. Or you could look for a smaller home in the most desirable zip code in Lafayette for way under the median price.