RealtyTrac Ranks Best U.S. Markets for Buying Residential Rental Properties

Daren Blomquist

IRVINE, CA,  Oct. 2, 2014 — RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its Q3 2014 Residential Property Rental Report, which ranks the best markets for buying residential rental properties.

For the report, RealtyTrac analyzed median sales prices for residential properties and average fair market rents for three bedroom properties in 586 U.S. counties with a combined population of 218 million people — 71 percent of the total U.S. population.

Rental returns were calculated using annual gross rental yields:  the average fair market rent of three-bedroom homes in each county, annualized, and divided by the median sales price of residential properties in the third quarter.

The 586-county analysis found that investors buying U.S. residential rental property in the third quarter of 2014 are getting an average annual return of 9.06 percent, down from an average annual return of 9.65 percent for the third quarter of 2013.

Median home prices in the 586 counties analyzed in the report increased more than 7 percent on average in the third quarter of 2014 compared to a year ago, while average fair market rents for three-bedroom homes increased an average of less than 1 percent.

In these counties on average 33 percent of the housing units were renter-occupied and 67 percent were owner-occupied. 

The average rental vacancy rates in these counties were 7.4 percent compared to a national average of 8.7 percent as of the end of 2012.

“The single family rental market is still strong, with returns averaging 9 percent in the 586 counties analyzed,” said Daren Blomquist, vice president at RealtyTrac. “Even so, the market is softening, with those same 586 counties averaging a nearly 10 percent return a year ago.

“In the high-risk, high-yield markets, where unemployment and vacancy rates are higher than national averages, the average return was a whopping 19 percent, actually up from a year ago thanks to a strong increase in rental rates,” Blomquist continued.

 “Home prices, meanwhile, were more volatile in the high-risk, high-yield markets, with three out of the 16 posting double-digit percentage decreases in median home prices from a year ago.”

For a complete copy of the company’s news release, please contact:

Jennifer von Pohlmann

PR Manager

Office: 949.502.8300 ext 139

jennifer.vonpohlmann@realtytrac.com