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IRVINE, CA—Investors are challenged to achieve the rental returns of the past due to ever-increasing home prices, says RealtyTrac's VP Daren Blomquist. In a recent 370-county analysis, the firm found that investors buying US residential rental property in the second quarter of 2014 are getting an average annual return of 9.97%, down from an average annual return of 10.6% a year ago.
“Home prices have increased at a faster pace than fair market rents in most counties over the past year, eroding the average returns available to investors buying rental properties,” says Blomquist. “Even so, an average annual return of nearly 1% across all the counties we analyzed nationwide is still solid, and investors holding on to rental property for the long term will also typically benefit from home price appreciation on top of the annual returns from rental income.”
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