The average gross rental yield decreased slightly in 2017 according to the Q1 2017 Single Family Rental Market Report from ATTOM Data Solutions, a fused property database.
The gross rental yield dropped slightly from an average of 9.1% in 2016 to 9% in the first quarter of 2017, according to the report.
The report analyzed single family rental returns in 375 U.S. counties each with a population of at least 100,000 and sufficient rental and home price data, along with more than 6,000 U.S. zip codes with a population of 2,500 more and sufficient rental and home price data. Rental data was from the U.S. Department of Housing and Urban Development, and home price data was from publicly recorded sales deed data collected and licensed by ATTOM.
“While good returns on single family rentals are hard to come by in high-priced coastal markets and in some other housing hot spots such as Denver and parts of Dallas, Austin and Nashville, solid returns on single family rentals will continue to be available in many parts of the Southeast, Rust Belt and Midwest for investors purchasing in 2017,” ATTOM senior vice president Daren Blomquist said.
“And single family rentals should continue to yield strong returns in many parts of the country going forward given the market undercurrents of low rent-ready housing inventory and low homeownership rates,” Blomquist said. “Average fair market rents increased in 2017 in 86% of the markets we analyzed even while average wage growth outpaced rent growth in 67% of markets — a recipe for sustainable growth in the rental market.”
Here are the top 10 metros with the highest annual gross rental yield on single-family rentals.
10. Springfield, Ohio – 13.4%
Three-bedroom fair market rent: $938
Median sales price in first quarter 2017: $84,000
Annual wage growth: 8.7%
9. Sioux City, Iowa-Nebraska-South Dakota – 13.6%
Three-bedroom fair market rent: $1,000
Median sales price in first quarter 2017: $88,500
Annual wage growth: 8.5%
8. Dayton, Ohio – 13.8%
Three-bedroom fair market rent: $1,090
Median sales price in first quarter 2017: $95,000
Annual wage growth: 5.6%
7. Pittsburg, Pennsylvania – 14%
Three-bedroom fair market rent: $1,106
Median sales price in first quarter 2017: $95,000
Annual wage growth: 5.4%
6. Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey-Delaware-Maryland – 14.1%
Three-bedroom fair market rent: $1,515
Median sales price in first quarter 2017: $128,700
Annual wage growth: 5.4%
5. Toledo, Ohio – 14.5%
Three-bedroom fair market rent: $1,066
Median sales price in first quarter 2017: $88,400
Annual wage growth: 7.4%
4. Binghamton, New York – 16.4%
Three-bedroom fair market rent: $1,086
Median sales price in first quarter 2017: $79,394
Annual wage growth: 7.3%
3. Augusta-Richmond County, Georgia-South Carolina – 16.6%
Three-bedroom fair market rent: $1,087
Median sales price in first quarter 2017: $78,500
Annual wage growth: 8.3%
2. Odgensburg-Massena, New York – 17.1%
Three-bedroom fair market rent: $1,105
Median sales price in first quarter 2017: $77,500
Annual wage growth: 9.5%
1. Youngstown-Warren-Boardman, Ohio-Pennsylvania – 17.2%
Three-bedroom fair market rent: $905
Median sales price in first quarter 2017: $63,051
Annual wage growth: 5.3%
