Good news for investors of single-family rentals: Market stability appears to be gaining steam, as RentRange’s Q4 2016 data shows a lessening percentage change between quarters while rent rates continue to increase.
“As we begin 2017, it continues to look bright for single-family rental investors,” said Wally Charnoff, chief executive officer, RentRange Data Services. “Compared to the Q3 2016 change in rent, we are seeing the percentage change begin to lessen while rents continue to increase, which should ultimately stabilize demand, keeping vacancy rates down. It remains important for investors to look at stability within a market, focusing on the market’s activity over time to ensure there is a good balance — low historical volatility with a current upswing.”
The Q4 2016 RentRange® data identified rental rate increases in areas like Cape Coral, Florida and Portland, both of which moved up the list into the top five, as well as newcomers including McAllen, Texas; Denver, Boston, Nashville and Miami. While rents remain high in the Bay Area, San Francisco dropped several positions, indicating the year-over-year rent change was not as significant as seen in past years. Comparatively, San Jose made the list as a new addition in Q4 2016.
Analyzing the average vacancy rate, demonstrating the percentage of all available units in a rental property that are vacant or unoccupied at a particular time, shows the highest rates, as reflected from the list, are seen in the Southeast region, whereas vacancy rates range from 10.5 percent in Charleston to 20.4 percent in Myrtle Beach. In these areas, builders and investors may need to compete for a limited number of renters. An oversupply of new properties can drive up the vacancy rate and eventually push rental rates down. This scenario is currently
Cape Coral, Florida made the top five as one of the highest rental rate increases with the Southwest region of the U.S. showing the highest amount of vacant or unoccupied rentals. According to a RentRange statistical area data analysis released on February 27, 2017.
Ranking by Year-Over-Year Rental Rate Increase — Q4 2016
 All rental and vacancy rate data referenced is provided for information purposes only and should not be considered advice or otherwise be relied upon for investment decisions.
RentRange produced the rankings of three–bedroom homes using metropolitan statistical areas, a standardized method for identifying city centers and immediate suburban areas. RentRange gathers rental data on approximately 250,000 single–family houses per month from a variety of contractual sources, including multiple listing services, property managers, landlords and listing websites. Vacancy rates are calculated from a proprietary algorithm based on data from the United States Postal Service.
RentRange is one of the nation’s premier providers of information for the single–family residential sector, delivering address and market–level rental data, analytics and rent–based valuation solutions for a diverse customer base. The RentRange® reports help customers make data–informed decisions about the single–family residential market. The RentRange suite of data solutions includes individual property reports, market metric reports, customized data and analytics and single–family residential investor lists. RentRange is part of the Altisource Portfolio Solutions S.A. (NASDAQ: ASPS) family of businesses.
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