Where Single-Family Rental Property Investment Paid Off Most

Investing in single-family rental properties became popular during the housing crash and subsequent recovery, as foreclosed homes and new renters flooded the market.

Single-family rentals grew the most, almost 10 percent, in Detroit, Las Vegas, Memphis, Tenn., and Fort Lauderdale, Fla. The greatest return on investment found in the study was in the Cape Coral-Fort Myers, Fla. metropolitan area, as single-family home values grew 89.6 percent from June 2011 to June 2018, and rental rates on these homes increased 59.1 percent. By contrast, El Paso, Texas had the worst ROI, with a 6.4 percent single family home value appreciation rate, and a 4.8 percent rent price decrease, Trulia reports.

In 2006, 13.2 percent of all single family homes were rentals. By 2014, that share had grown to 16.9 percent. This represents an additional 2.8 million single family rentals on top of what would be expected had the rate held at the 2006 level. This dramatic shift has happened against a back-drop of steadily declining for-sale inventory and affordability woes for both renters and buyers looking for homes in which they actually plan on living. Nationally, depending on what Census data you use, single family homes as a share of all residential rentals peaked sometime between 2014 and 2016, and has dropped slightly since then.

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