RentRange: Florida Cities Lead Nation with Largest Rental Rate Increases
By Kerry Curry, Contributing Writer
According to a new RentRange data analysis of the single-family rental property market, Florida has the most cities in the top 25 Metropolitan Statistical Areas (MSAs) ranked by average rental rate increase.
RentRange, which provides market data and analytics for the single-family rental industry, ranked the top 25 metropolitan statistical areas for rent increases in the first quarter of 2016 compared to the year-ago period. The analysis also examined average gross yields.
Florida cities accounted for nearly 25 percent of the top 25 spots in the analysis with Cape Coral-Fort Myers leading the way with a 29.2 percent rent increase in Q1 compared to the year-ago quarter. Average gross yield — the total annual income an investor receives from an investment property divided by the price or value for the property — was 7.8 percent. The average gross yield doesn’t account for operating expenses, including property taxes.
Second on the list was Naples-Marco Island, Florida, which had an average rental rate increase of 26 percent and an average gross yield of 8.5 percent. This is the first time that Naples has made the top 10, RentRange said. Rounding out the top three was Knoxville, Tennessee, with a 19.9 percent increase in the rental rate and a gross yield of 8.2 percent.
Syracuse, New York, and Milwaukee-Waukesha-West Allis, Wisconsin, also broke into the top 10 and were identified by RentRange as markets to watch.
Syracuse ranked 6th of the top 25 with a rental rate increase of 17.4 percent and a gross yield of 11.3 percent. The Milwaukee MSA ranked 7th with a rental rate increase of 17.2 percent and a gross yield of 10.5 percent.
Southern states dominated the list, but California nabbed four top 25 spots: San Jose-Sunnyvale-Santa Clara, 11th, 14.8 percent rental rate increase; Santa Barbara-Santa Maria-Goleta, 14th, 14 percent rental rate increase; Santa Rosa-Petaluma, 11.8 percent rental rate increase and San Luis Obispo-Paso Robles, 25th, 10.7 percent rental rate increase.
All the California MSAs in the top 25, with the exception of Santa Barbara- Santa Maria-Goleta, had average gross yields of less than 6 percent. Santa Barbara’s gross yield was 9.4 percent.
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