Where to Buy Single-Family Rentals in 2019

March 19, 2019

Investors are still finding the single-family rental market a lucrative business. The average annual gross rental yield for a single-family home (that is, the annualized gross rent income divided by the median purchase price) was 8.8 percent in the first quarter of 2019, up from 8.7 percent a year prior, according to ATTOM Data Solutions’ Q1 2019 Single-Family Rental Market report, analyzing 432 counties with populations of at least 100,000.

“Buying single-family homes to rent them out is a better deal for investors so far this year than it was at the same time in 2018, as profit margins are rising in a majority of counties across the United States,” says Todd Teta, chief product officer at ATTOM Data Solutions. “Last year, at this time, investors were seeing returns drop in three-quarters of the counties that were analyzed. So far this year, those margins are up in six out of every 10 counties analyzed.”

Despite the improving market, profits vary widely and investing in a single-family rental home is proving to be a profitable venture in select locations, Teta notes.

ATTOM Data Solutions ranked the best U.S. markets for buying single-family rental properties this year. The counties with the highest rental returns in the first quarter were:

  • Baltimore City, Md.: 24.5%
  • Bibb County, Ga. (in the Macon metro): 21.9%
  • Cumberland, N.J. (Vineland-Bridgeton metro): 21.2%
  • Winnebago, Ill. (Rockford metro): 17.1%
  • Wayne County, Mich. (Detroit metro): 17.1%
  • Cuyahoga County, Ohio (Cleveland metro): 12%
  • Allegheny County, Pa.: 10.9%
  • Cook County, Ill. (Chicago metro): 9.7%
  • Philadelphia County, Pa.: 9.4%

Rental returns rose compared to a year ago in more than half of the counties ATTOM researchers analyzed.

The report also identified the single-family rental markets most poised for growth. These markets are where average wages increased over the past year and the potential annual gross rental yield is 10 percent or higher. The high-growth markets include Wayne County, Mich. (Detroit); Cuyahoga County, Ohio (Cleveland); Allegheny County, Pa. (Pittsburgh); Milwaukee County, Wis.; and Marion County, Ind. (Indianapolis).