Four Single-Family Home Metrics That Tell You What You Need to Know About a Market
Summary
This article discusses key metrics for evaluating single-family rental markets, focusing on gross rental yield, three-bedroom rent trends, wage data, and home prices. Hosts should use these metrics, particularly those available in Equity Trust SFR reports, to analyze market potential, anticipate trends, and align their investment strategies.
Key Insights
- •Gross rental yield is a quick way to compare income potential between markets; a higher yield (e.g., 8%) may be more attractive than a lower one (e.g., 5%).
- •Rising rents may indicate strong tenant demand, while declining rents may suggest oversupply or affordability challenges.
- •If home prices are rising faster than wages, affordability may decline, potentially keeping more households in the rental market.
Action Items
- ✓Screen multiple geographies by gross rental yield to narrow down a list of potential markets.Effort: lowImpact: medium
- ✓If rents are rising steadily, explore if the market has sustainable drivers like job growth or population inflows.Effort: mediumImpact: medium
- ✓Compare price changes against rental and wage data before moving forward with property-level analysis.Effort: mediumImpact: medium
Tools & Resources
- →Equity Trust SFR Reports: Explore gross rental yield in your market with the Equity Trust SFR Reports.
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