If your investors are in search of higher profits, they may want to look to Baltimore; Macon, Ga.; Montgomery, Ala.; Detroit; and Atlanta. These metros each boast counties that have some of the highest potential for single-family rental returns in 2018, according to a new analysis by ATTOM Data Solutions. The real estate data firm’s Q1 2018 Single-Family Rental Market report ranks the top U.S. markets for purchasing single-family rental properties. Researchers looked at the single-family rental returns in 449 U.S. counties that had populations of at least 100,000.
The average annual gross rental yield among the 449 counties was 8.9 percent for 2018, a drop from 9.2 percent in 2017, according to the report. ATTOM calculated the average annual gross rental yield by taking the annualized gross rental income and dividing it by the median purchase price of single-family homes. “Despite declining returns in many areas, the single-family rental market continues to grow thanks to more activity by smaller and middle-tier investors,” says Daren Blomquist, senior vice president at ATTOM Data Solutions.
The biggest increases in market share over the past year has emerged from investors who own six to 10 single-family rentals, followed by those owning between 11 and 100 rentals, Blomquist says.“These smaller to mid-tier investors are benefiting from newfound efficiencies in acquisition, financing, and property management that allow them to buy outside their backyard in areas with higher potential returns, and to leverage their money to buy more properties,” he adds.
The counties with the highest potential annual gross rental yields in 2018 were:
- Baltimore County, Md.: 28.6%
- Bibb County, Ga. (Macon metro area): 21.8%
- Montgomery County, Ala. (Montgomery metro area): 21.7%
- Wayne County, Mich. (Detroit metro area): 21.7%
- Clayton County, Ga. (Atlanta metro area): 20.3%
Source: ATTOM Data Solutions
