PERSONAL FINANCE

10 rental markets where landlords make a killing

Eric McWhinnie

Cheat Sheet

Stocks aren't the only asset class with impressive returns. With the help of low homeownership rates and strong mobility demand, the rental market remains attractive for investors, especially in areas of the country experiencing double-digit returns.

A "For Rent" sign stands in front of a house in Chicago.

According to a new report from RealtyTrac, a leading source for comprehensive housing data, rental property in the United States posted an average annual return of 9.06% in the third quarter. That is down slightly from 9.65% in the same year-ago quarter, but still represents a significant return for landlords.

Furthermore, median home prices rose more than 7% on average from a year earlier. The report analyzed median sales prices for residential properties and average fair market rents for three bedroom properties.

"The single family rental market is still strong, with returns averaging 9% in the 586 counties analyzed," said Daren Blomquist, vice president at RealtyTrac, in a press statement. "Even so, the market is softening, with those same 586 counties averaging a nearly 10% return a year ago. In the high-risk, high-yield markets, where unemployment and vacancy rates are higher than national averages, the average return was a whopping 19%, actually up from a year ago thanks to a strong increase in rental rates."

Let's take a look at the top 10 rental markets where landlords are making a killing, using annual gross rental yields from RealtyTrac.

10. Hernando County, Florida

• Annual gross rental yield: 17.29%

• Vacancy Rate: 5.1%

9. Pasco County, Florida

• Annual gross rental yield: 17.30%

• Vacancy Rate: 8.9%

8. Columbia County, Florida

• Annual gross rental yield: 18.42%

• Vacancy Rate: 11.3%

7. Wayne County, Michigan

• Annual gross rental yield: 19.88%

• Vacancy Rate: 8.9%

6. Spalding County, Georgia

• Annual gross rental yield: 20.35%

• Vacancy Rate: 12.3%

5. Putnam County, Florida

• Annual gross rental yield: 22.63%

• Vacancy Rate: 6.3%

4. Howard County, Indiana

• Annual gross rental yield: 24%

• Vacancy Rate: 6.6%

3. Duplin County, North Carolina

• Annual gross rental yield: 24.4%

• Vacancy Rate: 8.8%

2. Clayton County, Georgia

• Annual gross rental yield: 26.88%

• Vacancy Rate: 16.9%

1. Edgecombe County, North Carolina

• Annual gross rental yield: 41.57%

• Vacancy Rate: 11.1%

Cheat Sheet is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

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