Earlier this week DS News reported on the single-family rental markets [1]identified with the right combination of high rental yields and low vacancy rates. But these aren’t the only markets holding a surprise for investors.
In a recent report from RealtyTrac [2], they have identified 18 markets that provide strong potential rental yields for properties purchased in 2016 along with low owner-occupancy rates for single family homes, meaning a high percentage of people who live in a home don’t own the home, but are renters. This is good news for single family rental investors because it shows a broad base of demand from renters in these markets.
The five most populous counties making the list are Baltimore City, Maryland; Clayton County, Georgia in the Atlanta metro area; Richmond City, Virginia; Yuma County, Arizona in the Yuma metro area; and Richmond County, Georgia in the Augusta-Richmond metro area.
Counties on the list with the highest share of non-owner occupants were Bibb County, Georgia, in the Macon metro area with a percentage of 45.7; Monroe County, Pennsylvania, in the East Stroudsburg metro area with 43.5 percent; Sumter County, South Carolina, in the Sumter metro area with a percentage of 42.3; Davidson County, North Carolina, in the Winston-Salem metro area with 42.1 percent; and Wicomico County, Maryland, in the Salisbury metro area with a percentage of 41.9 percent.
All 18 markets on the list have a potential gross annual rental yield, annualized rental income divided by median sales price, of at least 10 percent for homes purchased in 2016, and at least 33 percent of all single family homes in these 18 markets are non-owner occupied.