South Florida Ranks High for Returns on Single-Family Rentals
Four Florida counties—Palm Beach, Indian River, Collier, and Charlotte—were near the top of Attom's list of the best places to invest in single-family homes in 2023.
Four Florida counties were towards the top of Attom's Q1 2023 Single-Family Rental Market report's ranking of the best U.S. areas for purchasing single-family rental properties in 2023 in terms of rental-return potential for single-family investors.
If sufficient rental and home price information was available, the paper examined single-family rental returns in 212 U.S. counties with a population of at least 100,000. In addition to publicly available sales deed data licensed by Attom, the investigation examined median single-family house prices and rentals for three-bedroom properties from Attom's property database.
Among the 212 counties considered, the anticipated average yearly gross rental yield for three-bedroom properties across the country in 2023 is 7.5% (annualized gross rent revenue divided by purchase price). This is an increase from the average 6.7% in those same markets in 2022, and it was the first nationwide increase since at least 2019.
In 91% of those counties, the single-family rental yield will rise from 2022 to 2023 after falling in 72% of them from 2021 to 2022.
Rents are rising more quickly than housing prices nationwide due to rising rental yields. In 192, or 91% of the markets examined, three-bedroom rents increased more than single-family home prices from 2022 to 2023. Over the past year, rents have regularly increased by 5% to 20% while property value changes have historically ranged from a 5% loss to a 5% gain.
Rob Barber, CEO of Attom, claims that the overall housing market didn't do nearly as well in 2022 as it did in 2021. "Prices have at last reached a temporary ceiling. But it seems to be helping the increasing number of American investors who rent out single-family homes. For the first time in at least a few years, landlord yields have increased as a result of rising rents for single-family houses and flattening prices.
Attom's analysis highlights the effects on Florida rentals.
The counties with the highest projected annual gross rental yields are:
- Indian River County: 15%
- Collier County: 14.7%
- Wayne County, Michigan: 13%
- Mercer County, New Jersey: 12.7%
- Charlotte County: 12%
Highest predicted 2023 yields for counties with a population of 1 million or more:
- Wayne County, Michigan: 13%
- Cook County, Illinois: 11.5%
- Cuyahoga County, Ohio: 10.1%
- Oakland County, Michigan: 9.1%
- Palm Beach County: 8.5
Top current increases in annual gross rental yields (2022 to 2023)
- Orange County, Calif.: Up 42.7%
- Miami-Dade County: Up 34.1%
- Broward County: Up 32.4%
- Santa Clara County, Calif.: Up 30.1%)
- Palm Beach County: Up 29.5%
