SOURCE: RealtyTrac


November 22, 2013 10:28 ET

RealtyTrac Ranks Top 25 Hipster Zip Codes for Optimal Returns on Rental Properties

Top Zips in Saint Paul, Pittsburgh, Minneapolis, Seattle, Brooklyn, Chicago, San Francisco 17 Zips Post More Than 5 Percent Gross Rent Yield

IRVINE, CA--(Marketwired - Nov 22, 2013) - RealtyTrac™ (, the nation's leading source for comprehensive housing data, today released a special report ranking the top zip codes for rental returns in hipster hot spots -- where at least 20 percent of the population is between ages 25 and 34.

While the precise definition of hipsters is elusive -- which is likely just how they want it -- there's no doubt the culture surrounding the hipster lifestyle has a major impact on local real estate markets, and mostly in a positive way.

"Thanks to an influx of trendy restaurants, bars, coffee shops and other amenities, a neighborhood branded as hipster is likely to see property values and rental rates rise while vacancies and foreclosures decline," said Daren Blomquist, vice president at 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."

RealtyTrac 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. 

Using data from the Census bureau the report narrowed the nation's zip codes down to 83 hipster-heavy markets where at least 20 percent of the population is between the ages of 25 and 34 and where at least 20 percent of the population either walks to work or takes public transportation to work.

The 83 zip codes were also limited to those where at least 50 percent of the homes are occupied by renters and where the rental vacancy rate is 5 percent or below. The zip codes were then ranked by gross rent yields, which is the annual net income -- based on fair market rents from the U.S. Department -- divided by the median sales price for the zip code.

Among those 83 hipster heavy zip codes, 17 posted gross rent yields of more than 5 percent. Topping the list was 55101 zip code in Saint Paul, MN., where 35 percent of the population is in the hipster age range and 72 percent of all housing units are occupied by renters. The gross rent yield in the 55101 zip code of Saint Paul is 14 percent.

Three other Minnesota zip codes made the top 25 list, all located in the city of Minneapolis. New York and Virginia each contributed four zip codes to the list as well.

Report methodology
To choose the top 25 zip codes, RealtyTrac started with all cities with at least 20 percent of the population between the ages of 25 and 34. RealtyTrac further limited the list to zip codes where renters accounted for occupancy in at least half of all housing units, and where the vacancy rate on rental properties was five percent or less. Additionally, RealtyTrac narrowed the focus to zip codes where at least 20 percent of the population either walked to work or used public transportation to get to work. To arrive at the final rankings RealtyTrac sorted the list by gross yields based on fair market rents and median home prices and picked the top 25 based on that metric, all of which has gross yields above 4.5 percent.

Data Licensing and Custom Report Order
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About RealtyTrac Inc.
RealtyTrac ( is the nation's leading source of comprehensive housing information, with more than 1.5 million active default, foreclosure auction and bank-owned properties, and more than 1 million active for-sale listings on its website, which also provides essential housing information for more than 95 million homes nationwide. This information includes property characteristics, tax assessor records, bankruptcy status and sales history, along with 20 categories of key housing-related facts provided by RealtyTrac's wholly-owned subsidiary, Homefacts®. RealtyTrac's foreclosure reports and other housing data are relied on by the Federal Reserve, U.S. Treasury Department, HUD, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate.