Investing in Baltimore, Georgia, and New Jersey can bring the highest rental returns
Baltimore brings in the highest annual rental yields for landlords, according to a new report from ATTOM Data Solutions.
After analyzing single family returns in 432 US counties, ATTOM considered the best markets to be those with the highest annual gross rental yields.
Baltimore City, Md. (24.5%), Bibb County, Ga. (21.9%), and Cumberland, N.J. (21.2%) were the markets with the highest potential annual gross yields for 2019. The highest potential annual gross yields among counties with a population of at least 1 million include Cuyahoga County, Ohio (12%); Allegheny County, Pa., (10.9%); Cook County, Ill. (9.7%); and Philadelphia County, Pa. (9.4%).
The counties analyzed in the report each had a population of at least 100,000 and sufficient rental and home price data. ATTOM gathered the rental data came from the US Department of Housing and Urban Development, while home price data was from publicly recorded sales deed data ATTOM collected and licensed.
The average annual gross rental yield among 432 counties moved up slightly to 8.8% for 2019 from 8.7% in 2018.
However, investing in single-family homes in San Francisco, San Jose, and New York may not yield the highest rental returns. The top three counties with the lowest potential annual gross rental yields for 2019 were in California, including San Mateo County in the San Francisco metro area (3.4%), San Francisco County (3.7%), and Marin County, also in the San Francisco metro area (4%).
"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," said Todd Teta, chief product officer at ATTOM. "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 ten counties analyzed. But despite the generally rosier picture, profits vary widely and investing in the single-family home rental market is not always a great move. The typical bottom-line gain from county to county this year has ranged from as high as 29% to as little as 3%."
