Top 10 markets to buy a rental property

In these metro areas, small real estate investors can expect to find great home deals and double-digit returns on their investment, according to RealtyTrac.

Lubbock, Texas

mom pop real estate lubbock texas
In Lubbock, $115,000 can get you more than 2,100 square feet of living space and amenities like a large patio.
  • Median home price: $111,000
  • Median rent: $1,089
  • Return on investment*: 11.8%

With plenty of wide open spaces to build on, home prices remain low in and around Lubbock. Here, homes sell for almost half the national median price.

Investors who nab these deals typically rent the homes out to workers at nearby oil and gas fields or college students at Texas Tech University, which enrolls some 32,000 students, said local real estate agent, Lori Manning.

This three-bedroom house is a good example of what buy-and-rent investors in the area will find. For $115,000, a buyer gets plenty of space -- more than 2,100 square feet -- and many nice amenities like a gas fireplace and a large patio.

For further information on this house: Trulia

Source: RealtyTrac and RentRange.
*Return on investment is also known as gross rental yield, which is the percentage of profit or loss from an investment that is calculated by dividing the annual gross rental income by the purchase price or market value of the property. Ratings were calculated by comparing gross median rents (the return on investment before accounting for taxes, maintenance fees and other costs) for three-bedroom homes to median home price. All of the markets were relatively strong economically, with unemployment rates below the national average.
  @CNNMoney - Last updated September 30 2013 07:32 AM ET
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