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The new report, which analyzed data from 448 counties, found the national average annual gross rental yield was 9.4 percent, a slight decline from an average of 9.5 percent in the first quarter of 2015. Among the counties with the highest annual gross rental yields, Baltimore City topped the list at 28.5 percent. Also in the higher levels of the RealtyTrac list was Georgia’s Clayton County, which includes the Atlanta metro area (25.8 percent); Wayne County, Mich. in the Detroit metro area (24.2 percent); Bay County, Mich., in the Bay City metro area (21.2 percent); and Macon County, Ga. (20.6 percent). At the other end of the spectrum, the counties with the lowest annual gross rental yields were Arlington County, Va. in the Washington, D.C., metro area (3.3 percent) and California’s San Francisco County (3.4 percent).
Slicing and dicing its data further, RealtyTrac named Michigan’s Genesee County in the Flint metro area as the best market for future growth in single family rental returns, with a15.3 percent annual gross rental yield and a five percent annual wage growth. And Wisconsin’s Milwaukee County was named the best market for renting single family homes to Millennials, thanks to a
15.7 percent annual gross rental yield and a Millennial population share increase of 16.4 percent.
“Rapidly rising home prices and tepid wage growth have dampened single family rental investment returns and growth potential in many markets, but there are still plenty of solid opportunities available for real estate investors willing to cast a wider geographic net,” said Daren Blomquist, senior vice president at RealtyTrac. “Rents are rising faster than median home prices in 45 percent of the markets analyzed—indicating continued strong demand for rentals in those markets—while annual wage growth is outpacing rent growth in 43 percent of the markets—indicating room for rising rental returns in those markets.”