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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.

Nashville, Tenn.

mom pop real estate nashville tennessee
$145,000 buys a three-bedroom home on this big half-acre lot in Nashville.
  • Median home price: $149,000
  • Median rent: $1,263
  • Return on investment*: 10.2%

As a center for the country music industry, as well as higher education, Nashville's population includes a lot of transients.

The average rent for a home, at a little more than $1,260 a month, has held up strongly, while home prices remain low -- about a third less than the national average.

"As a lesser-known market nationally, Nashville tends to be somewhat under the radar as an investment opportunity," said realtor Bob Parks. "We see owners with less than 10 properties do very well."

An immaculate brick ranch with an oversized eat-in kitchen on a more than a half-acre lot in Nashville, like this one, can be had for $145,000.

For further information: 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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