Are you a rental property owner or an investor looking to maximize your returns? The Q1 2024 Single-Family Rental Market report by ATTOM has some exciting insights just for you! With rental yields on the rise and certain counties showing exceptional potential, there are plenty of opportunities on the horizon. Let’s dive into the key takeaways that can help you make smart decisions in the rental property market.
The Big Picture
The report analyzed 341 counties with populations of at least 100,000, focusing on median rents, home prices, and sales deed data. The average annual gross rental yield for three-bedroom properties is expected to be 7.55% in 2024, up from 7.39% in 2023. This increase is largely due to rents rising slightly faster than home prices in many areas.
A tight supply of homes for sale and modest home price increases have made buying homes less affordable for many. This has led to a surge in rental demand, creating favorable conditions for landlords and investors.
Top Counties for Rental Yields
Here are the counties expected to offer the highest rental yields for three-bedroom properties in 2024:
- Indian River County, FL: 14.6%
- St. Louis City, MO: 14.6%
- Cameron County, TX: 13.2%
- Monroe County, NY: 12.8%
- Richmond County, GA: 12.7%
For counties with populations of at least one million, the top performers are:
- Wayne County, MI: 12%
- Allegheny County, PA: 11.2%
- Cuyahoga County, OH: 10.2%
- Cook County, IL: 10.1%
- Riverside County, CA: 9.7%
Rising Rental Yields
Rental yields have increased in 216 of the 341 counties analyzed (63%) from 2023 to 2024. Noteworthy increases include:
- Taylor County, TX: from 7.6% to 11.3%
- Jefferson County, AL: from 8.5% to 12.1%
- Richmond County, GA: from 9.6% to 12.7%
- Midland County, TX: from 8.7% to 11.7%
- Aiken County, SC: from 8.4% to 11.1%
In large metro areas, significant increases were seen in:
- Riverside County, CA: from 7.4% to 9.7%
- Los Angeles County, CA: from 5.6% to 7.1%
- Fulton County, GA: from 6% to 6.8%
- Montgomery County, MD: from 4.4% to 5.2%
- Dallas County, TX: from 7.4% to 8.1%
Declining Rental Yields
Some large metro areas have experienced declines in rental yields, including:
- Kings County, NY: from 8% to 4.4%
- Cook County, IL: from 11% to 10.1%
- Wayne County, MI: from 12.8% to 12%
- Miami-Dade County, FL: from 7.9% to 7.3%
- Nassau County, NY: from 7.1% to 6.8%
Counties with the lowest potential annual gross rental yields for 2024 include:
- Santa Clara County, CA: 3%
- San Mateo County, CA: 3.4%
- Arlington County, VA: 3.8%
- Williamson County, TN: 3.9%
- San Francisco County, CA: 3.9%
Rental and Wage Trends
The report also found that in 58% of the counties analyzed, rents are rising faster than wages. In 42%, wages are increasing faster than rents. Additionally, in 63% of the counties, rents are growing faster than home prices, while in 37%, home prices are rising faster.
High Growth Areas
The report highlights 28 “SFR Growth” counties where average wages have increased over the past year and potential 2024 annual gross three-bedroom rental yields exceed 10%. These include major markets like:
- Cook County, IL (Chicago)
- Wayne County, MI (Detroit)
- Cuyahoga County, OH (Cleveland)
- Allegheny County, PA (Pittsburgh)
- Shelby County, TN (Memphis)
Takeaway for Investors
The report points to promising investment opportunities in single-family rentals across the U.S., especially in the Midwest, Northeast, and South, with high rental yields expected in 2024.
