Choose These Hipster Zips for Rental Returns

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IRVINE, CA-“Hipster zip codes,” loosely defined as markets that have an influx of trendy restaurants, bars, coffee shops and other amenities, tend to see property values and rental rates rise while vacancies and foreclosures decline. Locally based source of real estate and foreclosure data RealtyTrac Inc. has compiled a list of the top 25 hipster zip codes for rental returns in the country, and San Francisco is the only California market on the list.

According to RealtyTrac, as a nascent hipster market emerges, it can be an extremely appealing target for real estate investors looking to make some quick fix-and-flip profits or to purchase rental properties that provide a steady cash flow and the promise of strong appreciation going forward. The firm analyzed zip code-level data to identify established and emergent hyper-local hipster markets where investors can realize solid returns on rental properties while also enjoying low vacancy rates that ensure they won't have much down time between renters.

To select the top markets, RealtyTrac started with zip codes with a disproportionately large population in the prime hipster age range—between 25 and 34. Nationally, that segment accounts for 13% of the total population. The firm focused on zip codes with more than 20% of the population in that age range.

Additionally, RealtyTrac narrowed the list to zip codes where at least 20% of the population either walked to work or used public transportation to get to work, given that easily walkable, densely populated neighborhoods are another hallmark of hipster culture. It also narrowed the focus to zip codes where renters accounted for occupancy in at least 50% of all housing units, and where the vacancy rate on rental properties was 5% or less.

All of these filters left only 83 zip codes nationwide. The firm sorted those by gross yields based on fair market rents and median home prices to come up with the top 25 list, all of which had gross yields above 4.5%. Check out the full list below.

As GlobeSt.com reported last week, scheduled judicial foreclosure auctions on residential properties increased annually for the 16^th straight month in October, and foreclosure starts were up monthly for the second straight month, according to. Big jumps in foreclosure activity have been noted by the firm in Florida, Illinois and Colorado.

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