Best Counties For Purchasing Single-Family Rentals

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Best Counties For Purchasing Single-Family Rentals

Mar 31, 2023 | News | 0 comments

The Q1 2023 Single-Family Rental Market report by ATTOM has identified the top US markets for purchasing single-family rental properties in 2023, amidst the ongoing rise in rentals.

According to the report, the anticipated average yearly gross rental yield for three-bedroom properties (which is calculated by dividing annualized gross rental income by the purchase price) is expected to be 7.5% in 2023 for 212 examined counties. This figure has risen from 6.7% in the same markets in 2022, and it’s the first time since at least 2019 that there has been an increase in this number nationwide.

In 91% of the examined counties, there has been an increase in single-family rental yield from 2022 to 2023, which is a contrast to the decrease seen in 72% of these regions from 2021 to 2022.

As rental yields surge, rents are increasing at a quicker pace than home prices in most parts of the nation. Among the markets analyzed, three-bedroom rents have increased more than single-family home prices in 192 areas, or 91%, from 2022 to 2023. Rents have commonly grown by approximately 5% to 20% within the past year, while changes in home values have typically ranged from a 5% loss to a 5% gain.

The counties with the greatest anticipated yearly gross rental yields for 2023 are as follows: Indian River County, FL, situated in the Sebastian-Vero Beach metropolitan region (15%); Collier County, FL, located in the Naples metropolitan area (14.7%); Wayne County, MI, situated in the Detroit metropolitan area (13%); Mercer County, NJ, in the Trenton metropolitan area (12.7%); and Charlotte County, FL, situated in the Punta Gorda metropolitan area (12%).

Excluding Wayne County, the counties with the top expected yearly gross rental yields in 2023 among those with a populace of at least 1 million are as follows: Cook County (Chicago), IL (11.5%); Cuyahoga County (Cleveland), OH (10.1%); Oakland County, MI (outside Detroit) (9.1%); and Palm Beach County (West Palm Beach), FL (8.5%).

Out of the 50 counties with the highest rental returns analyzed for 2023, 29 of them are located in the Southern region, while an additional 13 are situated in the Midwest and eight are in the Northeast. However, none of the top 50 counties are located in the West.