Real Estate

These are the best counties to buy single-family rentals

Average annual gross rental inches forward to 8.8% in Q1

Single-family rental purchases inched forward in the first quarter of 2019, according to ATTOM Data Solutions' latest Single-Family Rental Market report.

The Single-Family Rental Market report analyzes single-family rental returns in 432 U.S. counties each with a population of at least 100,000.

According to the analysis, the average annual gross rental among the 432 counties was 8.8% for 2019, rising from an average of 8.7% in the prior year.

ATTOM Data Solutions Chief Product Officer Todd Teta said buying single-family homes to rent them out is a better deal for investors in 2019 than it was during the same time in 2018.

“Last year, at this time, investors were seeing returns drop in three-quarters of the counties that were analyzed,” Teta continued. “So far this year, those margins are up in six out of every 10 counties analyzed.”

However, despite the generally rosier picture, Teta notes profits vary widely and investing in the single-family home rental market is not always a great move.

In fact, according to Teta, the typical bottom-line gain from county to county this year has ranged from as little as 3% to as high as 29%.

Notably, the report indicates the housing markets that posted the highest rental returns included Baltimore City, Maryland, up 24.5%; Bibb County, Georgia, up 21.9%; Cumberland, New Jersey, up 21.2%; Winnebago, Illinois, up 17.1%; and Wayne County, Michigan, also up 17.1%.

However, the housing markets that posted the lowest rental returns included San Mateo County, California, up 3.4%; San Francisco County, California, up 3.7%; Marin County, California, up 4%; Santa Clara, California, up 4.2%; and Kings County, New York, up 4.3%.

NOTE: ATTOM Data Solutions calculated rental returns by utilizing annual gross rental yields provided by the U.S. Department of Housing and Urban Development.

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