Many millennials are currently choosing to rent as this large demographic of potential homebuyers waits in the wings for the right time to invest in a home. But recently, it seems more and more are gravitating toward single-family rentals from the traditional multifamily rentals.
For investors in the single-family rental market, these millennials could be beneficial that just reliable tenants. A recent analysis from RealtyTrac reports that a growing population of millennials should translate into growing demand for single family rentals as those millennials reach life milestones such as marriage and kids that may warrant a move from an apartment to a single family home. But these millennials could also provide investors with a convenient exit strategy for selling their homes.
So where are these markets that hold these young renters that also have high potential gross rental yields?
To answer that question, RealtyTrac was able to narrow down the 473 counties analyzed in the ATTOM Data Solutions Q3 2016 Single Family Rental Market Report to just 17 millennial meccas by only including counties where millennials (those born between 1981 and 1997) accounted for at least 25 percent of the population in 2014 and where the millennial population grew from 2013 to 2014. Additionally, all the counties on the list have a potential gross annual rental yield of at least 10 percent for properties purchased in 2016, ideal for single-family investors.
RealtyTrac found that five of the most populous counties making the list included:
- Philadelphia County, Pennsylvania with a 10.1 percent gross annual rental yield
- Milwaukee County, Wisconsin with a 13.1 percent yield
- Prince George’s County, Maryland in the Washington, D.C. metro area with a 10.1 percent yield
- Duval County, Florida in the Jacksonville metro area with a 11.2 percent yield
- El Paso County, Texas with a 11.0 percent yield
The counties found on the list with the highest share of millennials included:
- Onslow County, North Carolina in the Jacksonville metro area with 37.6 percent
- Richmond City, Virginia with 33.1 percent
- Bell County, Texas in the Killeen-Temple metro area with 30.1 percent
- Richland County, South Carolina in the Columbia metro area with 30.1 percent
- Saint Louis City, Missouri with 29.3 percent