The Atlanta Journal-Constitution
Report: Clayton best for residential rental investment return
Bibb County is No. 3 in country for returns on single-family rentals.
Times are good for owning rental properties and Georgia is home to two of the best places for such investment in the country, according to a report released Thursday.
Clayton County tops the list as the nation’s best place to buy single-family rental property and Bibb County follows closely behind at No. 3, according to California-based Attom Data Solutions, a real estate research firm that tracks rental activity.
With a 23.7 percent return on investment, owners of single-family rental homes in Clayton see more than twice the return on their investment than any other place in the country, the Attom Data Solution’s report noted. The average annual yield among the 375 U.S. counties tracked in the survey was 9.0 percent.
The trend is expected to continue as the nation’s housing inventory hasn’t kept pace with population growth and more Americans ditch homeownership for the easy care of renting.
“Solid returns on single family rentals will continue to be available in many parts of the Southeast, Rust Belt and Midwest for investors purchasing in 2017,” said Daren Blomquist, senior vice president at ATTOM.
The rental market is so prosperous that Stockbridge realtor David Barton bought a real estate company last August which focuses heavily on managing rental property on the southside, including Clayton County.
“The return on the investment is one of the highest around,” Bar-
ton said of Clayton.
The news of Clayton’s new title was greeted with halfhearted enthusiasm by the Clayton’s top official who was a bit “concerned” by the distinction.
“It might be the best place to purchase rental property but we always welcome citizens to become homeowners,” Clayton Commission Chairman Jeff Turner said Wednesday. “Whether they’re renting or owning, we still want responsible people in the homes.”
About a third of Clayton County’s single-family homes are rental properties, and half of those — or 15 percent — are owned by institutional investors, according to a special report published by The Atlanta Journal-Constitution in April. The AJC report also noted that the number of single-family rentals throughout metro Atlanta has doubled since 2000 due to an influx of rental firms that purchased homes at deep discounts during the economic downturn and are holding onto them.
Attom calculated the average yield by dividing a year’s rent income by the median purchase price of single family homes in the area.
The second-best returns were in Baltimore.
But in third place, not far behind, was Bibb County, which includes Macon. The average yield for rental property owners in Bibb is 23.5 percent, according to Attom.
A number of broad market factors are making the outlook for investing in rentals bright, Bloomquist said.
■ The share of Americans who are renting has risen.
■ The share of Americans who own homes has declined.
■ The millennials, who have been less enthusiastic about home purchase, are steadily becoming dominant in the working-age population.
■ The nation’s stock of single-family homes has not kept pace with the growth of the population.
■ And finally, rents are rising, but often not as fast as pay is going up.
“Average fair market rents increased in 2017 in 86 percent of the markets we analyzed even while average wage growth outpaced rent growth in 67 percent of markets,” Bloomquist said.
That, he said, “is a recipe for sustainable growth in the rental market.”