RentRange Identifies 25 Markets with the Highest Average Gross Yield
The Q1 2017 RentRange® data shows that the highest yielding markets are dominated by older metro areas in the Midwest and Northeast. Sales price increases in these markets have lagged behind faster growing markets in the South and Southwest. Some notable exceptions to this Midwest and Northeast domination are metro areas such as
Analyzing the average vacancy rates, which is the percentage of rental properties that are vacant or unoccupied at a particular time, the lowest rates from the list are in
Only four of the markets included in the high-yielding list show a decline in rent over the past year:
The pace of investor purchases can also be an indicator of the attractiveness of the market. A high number of purchases generally indicates that a large number of investors find the market appealing from a single-family rental investment standpoint.
"The first step every investor should take when looking to invest in single-family rentals is to conduct due diligence by researching historical housing and rental data, the local economy and property-specific financial information like insurance, taxes, gross yield, net yield and cash flow," said Dennis Cisterna, chief revenue officer, RentRange Data Services. "Today's investor has a leg up on their predecessors because this type of information is now readily available in a way it was never before. While many markets may have high yields, they may have quite different rent growth percentages and vacancy rates. A strong market would generally have a combination of high yields, low vacancies and high rent growth."
| Ranking by Average Gross Yield - Q1 20172 | ||||||||||
| Rank | MSA | Average Gross Yield - Q1 | Change in Rent - Q1 | Average Vacancy Rate - Q1 | Investor Purchases - Q1 2016 - Q1 2017 | |||||
| 1 | 17.0% | 0.9% | 8.6% | 45,159 | ||||||
| 2 | 16.6% | 0.9% | 8.0% | 6,408 | ||||||
| 3 | 15.8% | 3.8% | 5.3% | 3,478 | ||||||
| 4 | 15.7% | 5.3% | 10.5% | 1,666 | ||||||
| 5 | 15.6% | 2.1% | 5.9% | 10,951 | ||||||
| 6 | 15.1% | 3.6% | 5.1% | 3,361 | ||||||
| 7 | 15.0% | 2.7% | 5.8% | 2,187 | ||||||
| 7t | 15.0% | 9.3% | 9.6% | 3,263 | ||||||
| 7t | 15.0% | 1.1% | 7.6% | 4,142 | ||||||
| 8 | 14.5% | -1.2% | 7.4% | 2,365 | ||||||
| 9 | 14.0% | 0.9% | 7.4% | 6,291 | ||||||
| 10 | 13.9% | 2.8% | 11.9% | 6,020 | ||||||
| 11 | 13.7% | 0.2% | 9.3% | 3,752 | ||||||
| 12 | 13.5% | 2.6% | 7.3% | 2,480 | ||||||
| 12t | 13.5% | -2.0% | 4.4% | 1,572 | ||||||
| 13 | 13.4% | 1.3% | 6.5% | 7,887 | ||||||
| 14 | 13.3% | 0.9% | 4.8% | 13,856 | ||||||
| 15 | 13.2% | 0.9% | 4.5% | 5,611 | ||||||
| 15t | 13.2% | 1.3% | 5.2% | 6,955 | ||||||
| 15t | 13.2% | 2.7% | 6.0% | 2,481 | ||||||
| 15t | Lansing-East Lansing MI | 13.2% | 9.4% | 5.4% | 4,994 | |||||
| 16 | 13.1% | 0.4% | 7.0% | 1,594 | ||||||
| 16t | 13.1% | 4.2% | 4.5% | 8,308 | ||||||
| 16t | 13.1% | -0.2% | 7.2% | 2,857 | ||||||
| 17 | 12.8% | -1.7% | 4.3% | 6,681 | ||||||
Methodology :
RentRange produced the rankings of three-bedroom homes using metropolitan statistical areas, a standardized method for identifying city centers and immediate suburban areas. RentRange gathers rental data on approximately 250,000 single-family houses per month from a variety of contractual sources, including multiple listing services, property managers, landlords and listing websites. Vacancy rates are calculated from a proprietary algorithm based on data from the
About RentRange Data Services
RentRange Data Services is an innovative marketing services company specializing in
About RentRange®
RentRange is one of the nation's premier providers of information for the single-family residential sector, delivering address- and market-level rental data, analytics and rent-based valuation solutions for a diverse customer base. The RentRange® reports help customers make data-informed decisions about the single-family residential market. The RentRange suite of data solutions includes individual property reports, market metric reports, customized data and analytics and single-family residential investor lists. RentRange is part of the
About
1 RentRange reviewed data for single-family, three-bedroom homes.
2 All yield, rental, vacancy rate and investor purchase data referenced is provided for information purposes only and should not be considered advice or otherwise be relied upon for investment decisions.
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