Single-family rentals less profitable in costliest markets

  • Some of the nation’s most expensive for-sale markets trail the national average in single family rental returns.
  • Home values outpace rents in 55 percent of the markets analyzed, which generally indicates a lagging rental market as compared to homeownership, yet wage growth surpasses rents in 43 percent of markets.

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Rapidly rising home values combined with low national wage growth is thwarting profitability on single-family investment properties in markets like San Francisco, New York City and D.C. Some of the nation’s most expensive for-sale markets trail the national average in single family rental returns, according to RealtyTrac’s first-quarter single-family rental market investing report.