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The Best and Worst Markets for Buying a Rental in the United States

Original article by HousingWire

buying a rentalA new report by RealtyTrac, shows the best and worst markets for buying a rental property.

The report was based on 448 counties with populations of at least 100,000 and were ranked based on the potential annual gross rental yield identifying the best counties for future growth in the single-family rental market.

We know from previous reports that rents have been steadily rising, but so have home prices. So what impact does this have on real estate investors? Investors will need to broaden their reach to find areas where the opportunity is greater–And there are plenty of them.

Single Family Rental Returns by County

According to RealtyTrac, Baltimore, Maryland had the highest annual gross rental yields at 28.5%. Clayton County, Georgia came in second with 25.8%, followed by Wayne County, Michigan; Bay County, Michigan and Macon County, Georgia.

In the south Florida market, Miami-Dade County’s potential single family rental return was 8.4%. Rates are typically rising to 4% and home prices are up 11% annually.

Best & Worst SFR Returns by State

On the other hand, the county with the lowest annual gross rental yields was Arlington County, Virginia at 3.3%. This was followed by California Bay area at 3.4%, then Williamson County, Tennessee and Kings County, New York.

The Real Property Management organization expects vacancy rates to start stabilizing in 2016, but continue to decline slightly.  This will put pressure on rental rates. Rental rate increases will continue to outpace inflation by a wide margin, and be higher than increases in the price of housing in general. Investors will benefit from improving economic conditions including stable employment rates, flat wage growth, and higher interest rates.

Where are You Looking to Buy Your Next Investment Property?

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.