According to a new report from leading data analytics provider HouseCanary, the single-family rental market is strong and has maintained Effective Gross Yields that average 8% nationwide. The data is from HouseCanary’s most recent Rental Investment Index (HCRI Index) which allows single-family rental home investors, lenders, and renters benchmark the health of the single-family for-lease market by individual state, ZIP code and block. Twenty-eight out of 50 MSAs in the country surpassed the nationwide average Effective Gross Yield of 8%. Rochester, NY topped the list with a yield of 17.2%, while Sunnyvale/Santa Clara, CA was at the bottom with 3.9%.
The HCRI Index measures Effective Gross Yield for the industry, computed as the current fair market annualized rent minus estimated property tax, divided by the current fair market home value. Effective Gross Yield is an important profitability metric for single-family rental home lenders and investors, who have historically only been able to calculate gross yields for individual properties or their own portfolio of properties.