IRVINE, CA and WESTMINSTER, CO--(Marketwired - Sep 19, 2013) - RealtyTrac® (www.realtytrac.com), the nation's leading source for comprehensive housing data, and RentRange (www.RentRange.com), the nation's leading provider of residential Rental Market Intelligence™ to the financial services and real estate industries, today released a list of the Top 25 Hidden Gem Single Family Rental Markets nationwide based on gross rental yield, the expected return on investment before accounting for taxes, maintenance fees and other costs.
Top 25 Hidden Gem Single Family Rental Markets
|#||County||State||Metro Area||Median Market Value||Median Rent Value||Gross Yield||Investor Sales %||Population||Unemployment|
|1||Wichita||TX||Wichita Falls, TX||$84,000||$938||13.40%||5%||130,976||6.80%|
|3||Canadian||OK||Oklahoma City, OK||$131,000||$1,176||10.80%||4%||109,814||4.90%|
|4||Williamson||TX||Austin-Round Rock, TX||$158,000||$1,403||10.70%||5%||391,715||5.70%|
|9||Jefferson||LA||New Orleans-Metairie, LA||$153,000||$1,260||9.90%||3%||431,019||7.30%|
|15||Kent||MI||Grand Rapids-Wyoming, MI||$116,000||$936||9.70%||3%||599,432||6.90%|
|17||Santa Rosa||FL||Pensacola-Ferry Pass-Brent, FL||$145,000||$1,153||9.50%||4%||147,838||6.70%|
|18||Escambia||FL||Pensacola-Ferry Pass-Brent, FL||$116,000||$913||9.40%||4%||297,940||7.10%|
|21||St. Charles||MO||St. Louis, MO-IL||$158,000||$1,232||9.40%||4%||350,606||6.10%|
|22||Newport News City||VA||Virginia Beach-Norfolk-Newport News, VA-NC||$167,000||$1,286||9.20%||4%||181,822||6.80%|
|23||Waukesha||WI||Milwaukee-Waukesha-West Allis, WI||$208,000||$1,595||9.20%||1%||386,130||6.30%|
The Top 25 Hidden Gem Single Family Markets were determined by evaluating gross rental yield data provided by RentRange, institutional investor sales data provided by RealtyTrac, and unemployment data for more than 450 nationwide counties with populations of 100,000 or more. The analysis was limited to single family homes with three bedrooms. The top 25 markets had the highest gross rental yields in counties where institutional investor purchases accounted for 5 percent or less of all residential sales in the three-month period ending in July, and the unemployment rate was 7.5 percent or lower.
Gross rental yield is a commonly used method of comparing properties. It is determined by dividing the gross annual rental income by the purchase price or market value of the property, and offers an apples-to-apples way to compare rental properties and geographies.
"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. "With this analysis we've identified the top overlooked markets where single family rentals still make good financial sense but where there is little to no competition from the big players."
"Real estate investment opportunities vary greatly market by market," said Wally Charnoff, CEO of RentRange. "The availability of gross rental yield information and other valuable analytics empower buyers to make more scientific decisions about where to invest."
The hidden gem counties may represent opportunities for smaller investors or owner-occupiers, with less competition from institutional investors. Investor activity claimed more than 5 percent of the market in over 20 percent of all counties for the three months ending in July. "Heavy buying from large institutional investors in some markets contributes to price appreciation and scarcity of listings, leaving small investors and owner-occupiers feeling left out in the cold. These levels of institutional investor buying will ultimately drive prices up and rental yields down," said Jake Adger, Chief Economist of RealtyTrac.
Local broker quotes from the RealtyTrac Network
"As inventory continues to decline in the mid-Tennessee market, renting a home is becoming more of an option compared to the last few years, and our market reflects that with strong returns on rental investment," said Bob Parks, CEO of Bob Parks Realty. "Also, as a lesser-known market nationally, Nashville tends to be somewhat under the radar as an investment opportunity. We have enjoyed a strong rental market, and tend to see owners with less than 10 properties do very well with returns making this a great time for investors big or small to look at Middle Tennessee."
"While we are seeing depletion in our investment inventory, we are not necessarily seeing an increase in large investor activity. This is likely because our region has not been recognized as a 'distressed market.' In fact, Southwestern Pennsylvania has enjoyed an increase in sales of 12.5 percent and property values have had a steady appreciation of roughly 2 to 4 percent annually," said Ron Croushore, CEO Prudential Preferred Realty.
"Due to the influx of companies within the energy sector, investment properties have experienced strong rental returns," continued Croushore. "Additionally, the boom of Marcellus Shale over the past few years has brought employees looking for long-term rentals into our area; which, in turn, has driven the rental rate up and tightened the overall market. We predict this trend will progress into the years ahead as the energy industry continues to grow and employ the region."
Top 25 Investor-Saturated Single Family Rental Markets
Markets with 500 or more sales in the 3 months ending in July
|#||County||State||Metro Area||Investor %|
|1||Clayton||GA||Atlanta-Sandy Springs-Marietta, GA||50%|
|2||Henry||GA||Atlanta-Sandy Springs-Marietta, GA||49%|
|3||Rockdale||GA||Atlanta-Sandy Springs-Marietta, GA||39%|
|4||Walton||GA||Atlanta-Sandy Springs-Marietta, GA||32%|
|5||Paulding||GA||Atlanta-Sandy Springs-Marietta, GA||30%|
|6||Douglas||GA||Atlanta-Sandy Springs-Marietta, GA||29%|
|10||Hillsborough||FL||Tampa-St. Petersburg-Clearwater, FL||25%|
|11||Cherokee||GA||Atlanta-Sandy Springs-Marietta, GA||25%|
|12||Gwinnett||GA||Atlanta-Sandy Springs-Marietta, GA||24%|
|13||Dekalb||GA||Atlanta-Sandy Springs-Marietta, GA||21%|
|17||Canyon||ID||Boise City-Nampa, ID||19%|
|18||Fulton||GA||Atlanta-Sandy Springs-Marietta, GA||19%|
|21||Cobb||GA||Atlanta-Sandy Springs-Marietta, GA||17%|
|24||Clarke||GA||Athens-Clarke County, GA||16%|
|25||Clark||NV||Las Vegas-Paradise, NV||16%|
Median Market Value: Represents the middle market price of three bedroom single family properties within the MSA for the month of August 2013.
Median Rent Value: Represents the middle rent price of three bedroom single family properties within the MSA for the month of August 2013.
Gross Rental Yield: A percentage based measurement of profit or loss from an investment that is calculated by dividing the annual gross rental income by the purchase price or market value of the property.
Institutional Sales Percent: Percent of all residential sales where an institutional investor was the buyer during the May to July 2013 time period.
Institutional Investor: Any entity that has purchased at least 10 single family properties in a 12-month period.
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About RealtyTrac Inc.
RealtyTrac (www.realtytrac.com) is the nation's leading source for comprehensive housing data, with more than 1.5 million active default, foreclosure auction and bank-owned properties, and more than 1 million active for-sale listings on its website, which also provides essential housing information for more than 100 million homes nationwide. This information includes property characteristics, tax assessor records, bankruptcy status and sales history, along with 20 categories of key housing-related facts provided by RealtyTrac's wholly-owned subsidiary, Homefacts®. RealtyTrac's foreclosure reports and other housing data are relied on by the Federal Reserve, U.S. Treasury Department, HUD, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate.
RentRange is the nation's leading provider of Rental Market Intelligence™ to the financial services and real estate industries. It delivers a wide assortment of address and geography level rental data, analytics, and rent based valuation solutions for single and multi-family properties, with products that include a combination of on-demand automated rent valuation reports and subscription based macro data available at the MSA, county, city and zip code levels. RentRange clients include institutional investors (REITs, hedge funds, private equity groups); property managers and landlords; mortgage lenders and financial institutions; default servicers and asset managers; Wall Street firms and rating agencies; government sponsored enterprises (GSEs); technology companies; and valuation-based fulfillment service organizations. RentRange was founded in 2007 and is located in the greater Denver area. For more information please visit RentRange.com.