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SFR Investors Use Residential Data to Uncover Purchase Opportunities Amid Rental Rate Increases

saving-homesRental rates and income yields continue to rise in the single-family rental market, affecting how real estate investors target purchase opportunities and how much landlords make on average.

RentRange, a provider of rental market intelligence, recently released data which help investors define and uncover opportunities nationwide.

The company ranked the top 25 U.S. Metropolitan Statistical Areas (MSAs) by average rental rate increase for single-family homes between the third quarter of 2015 and the same quarter in 2014. The data analysis also determined the average yield (landlord income) in these same markets.

The Cape Coral, Florida metro came in first on the list with the largest change in third quarter rent year-over-year at 23.6 percent and an average yield of 9.1 percent. Sacramento, California (17.6 percent/6.6 percent); North Port, Florida (17.2 percent/9.7 percent); San Francisco, California (17.0 percent/5.6 percent); and Charleston, South Carolina (16.5 percent/9.0 percent) wrapped up the top five.

alt“We continue to see substantial opportunity in real estate investing, but strengthening real estate markets in many regions require investors to be more informed before buying an investment property and rehabilitating it in order to achieve their desired return ,” said Walter Charnoff, CEO of the RentRange.

According to RentRange, Southern and Western cities had the largest rental rate increases. Meanwhile, Midwest and Northeast cities experienced smaller increases.

Among the strongest cities in terms of rental rate increases were California and Florida, which accounted for seven of the top 10 markets. On the other hand, yields in Central U.S. and Midwest were much higher than many markets in California and Florida.

“While, not surprisingly, California and Florida are experiencing the largest rental rate increases, further analysis reveals that markets in Alabama, Texas, Kansas and Ohio actually produce a much higher average yield," Charnoff said.

Click here to view the full report.

About Author: Xhevrije West

Xhevrije West is a writer and editor based in Dallas, Texas. She has worked for a number of publications including The Syracuse New Times, Dallas Flow Magazine, and Bellwethr Magazine. She completed her Bachelors at Alcorn State University and went on to complete her Masters at Syracuse University.
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