25 Single Family Rental Markets Predicted to See the Largest Growth in 2017

by | BiggerPockets.com

A new study released by RealtyTrac and curated by ATTOM Data Solutions has revealed the rankings of the best U.S. markets for buying single family rental properties this year. Where does your market lie and what are some new locales you might what you check out? Let’s delve into the findings.

Methodology

This study looked at single family returns over 375 counties in the United States with populations of 100,000 or more—as well as 6,000 zip codes with populations of 2,500 or more—that provided sufficient home and rental price data. Rental numbers were pulled from the U.S. Department of Housing and Urban Development, and home price data was sourced from publicly recorded sales deed data collected by ATTOM Data Solutions.

Overall Trends

Says Daren Blomquist, Senior VP of ATTOM Data Solutions, “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.”

Related: 5 Ways the Housing Market Could Change in 2017

Despite annual gross rental yield being down from 9.1 percent in 2016 to 9.0 percent in 2017, Blomquist noted, “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. Average fair market rents increased in 2017 in 86 percent of the markets we analyzed even while average wage growth outpaced rent growth in 67 percent of markets—a recipe for sustainable growth in the rental market.”

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5 Counties With the Highest Single Family Rental Returns

Those areas with the highest annual gross rental yields include:

  1. Clayton County, Georgia, in the Atlanta metro area (23.7 percent)
  2. Baltimore City, Maryland (23.6 percent)
  3. Bibb County, Georgia, in the Macon metro area (23.5 percent)
  4. Monroe County, Pennsylvania, in the East Stroudsburg metro area (20.6 percent)
  5. Saginaw County, Michigan (18.8 percent)

5 Counties With the Lowest Single Family Rental Returns

Meanwhile, the lowest annual gross rental yields were seen in:

  1. Washington, D.C., metro area (3.4 percent)
  2. Williamson County, Tennessee, in the Nashville metro area (3.9 percent)
  3. Santa Cruz County, California (4.1 percent)
  4. Norfolk County, Massachusetts, in the Boston metro area (4.2 percent)
  5. Santa Clara County, California, in the San Jose metro area (4.2 percent)


Related: 7 Real Estate Investors Discuss What They’re Seeing in Their Local Markets

25 Single Family Rental Markets With the Highest Growth in 2017

The study also identified 25 counties expected to have the best potential for future growth of returns on single family rentals based on average weekly wages increasing at least 5 percent annually, outpacing fair market rents, as well as gross annual yields of 9.5 percent or higher.

Image via RealtyTrac.com. For interactive chart, click here.

Would you consider investing in any of the above markets? Where do you predict will see the biggest returns this year?

Let me know your predictions with a comment!

About Author

Allison Leung

A career writer, editor and blogger, Allison serves as the Director of Content for BiggerPockets.com. In the past, she has channeled her passion and curiosity for all things real estate into her jobs by working in real estate law and heading a blog about real estate market trends. Don’t ask about her dog, Ace, unless you want to see approximately 500 photos of his (adorable) face.

8 Comments

  1. Christopher Smith

    I have two properties in the South West corner of area #8.

    One I just acquired this last July for 185K and its already 236K on Zillow. That’s really the problem once you find something good its gone in a heart beat. Went to bid on a very similar one in the very same complex last month until I saw it already had an offer of 240K. Most I can possibly afford to pay is 200K to 210K if it rents at $2,100. Great B+ neighborhood with newer homes and 10 rated schools, but already too rich for anymore of my blood.

    Priced out of one more market.

  2. Allison, did you not publish same forecasts in 2015 and 2016? Did you look back to see how inaccurate they were? RealtyTrac has no clue about U.S. real estate markets. It has employees to crank numbers sitting in an office and spit them out to generate publicity for the company.

    • Jeffrey Nordin

      BZ, that’s an interesting aside. It’s easy to hear these numbers and get blind to hard facts because of our faith in data we want to believe.

      I hadn’t even considered that the underlying data might be false. I’m not saying it is, but thanks for reminding me/us to always do our due diligence!

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