The Best Market For Buying Single-Family Rentals Is...

Investors seeking the best returns in the single-family rental property market will find plenty of opportunities in the Midwest, Northeast and South, according to a new data report from ATTOM.

In an analysis of 341 counties, ATTOM found the counties with the highest potential annual gross rental yields on three-bedroom properties for 2024 are Indian River County, Florida, in the Sebastian-Vero Beach metro area (14.6%); St. Lous City, Missouri (14.6%); Cameron County, Texas, in the Brownsville-Harlingen metro area (13.2%); Monroe County, New York, in the Rochester metro area (12.8%) and Richmond County, Georgia, in the Augusta-Richmond County metro area (12.7%).

ATTOM observed that investment returns for landlords increased as rents rose slightly faster than home prices across a majority of the country. From 2023 to 2024, median three-bedroom rents rose more than median single-family home prices in 216, or 63%, of the markets analyzed. The greatest gains were found in Taylor County (Abilene), Texas (yield up from 7.6% in 2023 to 11.3% in 2024); Jefferson County (Birmingham), Alabama (up from 8.5% to 12.1%); Richmond County (Augusta), Georgia (up from 9.6% to 12.7%); Midland County, Texas (up from 8.7% to 11.7%) and Aiken County, South Carolina (outside Augusta, Georgia) (up from 8.4% to 11.1%).

Median three-bedroom rents are rising faster than average wages in 197 of the 341 counties analyzed (58%), while the opposite equation was found 144 of the counties (42%). The report identified 28 “SFR Growth” counties where average wages grew over the past year and potential 2024 annual gross three-bedroom rental yields exceed 10% – these include Cook County (Chicago), Illinois; Wayne County (Detroit), Michigan; Cuyahoga County (Cleveland), Ohio; Allegheny County (Pittsburgh), Pennsylvania; and Shelby County (Memphis), Tennessee.

“The U.S. home sales market cooled off a good bit last year, with some of the weakest gains over the past decade,” said Rob Barber, CEO at ATTOM. “But that wasn’t enough to make home prices affordable for most workers, which likely fed enough demand to push up rents and yields for investors who lease out single-family properties. The fact that so few homes are available for sale in many markets clearly further helped increase rental demand for landlords and boost their bottom lines.”