RealtyTrac joined forces with RentRange to produce a comprehensive list of the best rental markets in the country for single family based on a number of criteria including gross rental yield, and expected return on investment before accounting for taxes, maintenance fees and other costs.
As RealtyTrac’s Chief Economist Jake Adger explains, the analysis was limited to three bedroom single family homes. Other considerations in determining the top 25 list included having an unemployment rate below 7.5 percent and areas that had populations exceeding 100,000 people. Excluded from the analysis were areas that did not have a minimum of 500 home sales in the three month period ending July 2013.
These are also areas where the markets offer more opportunity for smaller real estate investors and owner-occupiers with less competition from the large institutional investors.
The top counties all exhibited good potential for cash flow with annual gross yields over 9 percent. At the top of the heap was Wichita County, Texas, which had a a gross yield of more than 13 percent.
“Buying single family homes as rentals still yields solid returns in many markets across the nation, but it is difficult for individual investors and even small-to-medium sized institutional investors to find reasonably priced inventory in markets dominated by the 800-pound gorillas in the single family rental space,” said Daren Blomquist, vice president at RealtyTrac.