Single-Family rental investors, listen up. RealtyTrac has identified the sweet combination of markets that are the best for high rental yields with low vacancy rates.
These 22 markets were identified out of the 473 U.S. counties analyzed in the report by limiting the list to only counties with an investment property vacancy rate below 3.0 percent (the average across all 473 counties was 4.0 percent) and a gross annual rental yield of 10 percent or higher found by dividing the annualized rental income by median sales price.
The five most-populous counties making the list were El Paso County, Texas; Orange County, New York; Westmoreland County, Pennsylvania; Lehigh County, Pennsylvania; and Marion County, Florida.
The report also acknowledges the counties with the highest rental yields on the list. This include Monroe County, Pennsylvania in the East Stroudsburg metro area with a rental yield of 16.0 percent; Hernando County, Florida in the Tampa metro area with a yield of 14.3 percent; Lackawanna County, Pennsylvania in the Scranton metro area with a yield of 12.1 percent; Westmoreland County, Pennsylvania in the Pittsburgh metro area with a yield of 11.8 percent; and Davidson County, North Carolina in the Winston-Salem metro area with a yield of 11.8 percent.
Markets on this list with the lowest investment property vacancy rates include Spotsylvania, Virginia with a vacancy rate of 0.3 percent; Monroe, Pennsylvania with a rate of 0.4 percent; Citrus, Florida with a rate of 1.2 percent; Marion, Florida with a rate of 1.9 percent; and El Paso, Texas with a rate of 1.9 percent.
Many of these areas are a stray from the beaten path and not the usual markets that institutional investors as well as other single family investors usually gravitate towards when deciding where to invest their money, time, and resources. This is not necessarily a con, though. RealtyTrac says that the lack of competition in these markets helps maintain the ideal combination of great returns and low vacancy rates.