6.000 12.000 VERAGE YIELD 1 . Avg Yield

Raleigh Gross Rental Yields

Avg Yield

6.000 12.00

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Salem are higher at 18.25 percent and 19.85 percent, respectively. This indicates only a small number of SFR housing for renters, and still plenty of room for investors. Demand is also high for SFR homes with a 5.9 percent vacancy rate and a slightly higher than average SFR rental listing duration of 28 days. Gross rental yields (excluding expenses) for the Raleigh MSA ranks in the lowest quartile for major metros at 7.6 percent, while the national average among the top 100 markets is at 8.5 percent. There are a handful of zip codes with yields over 10 percent towards the southeast, lower yields are found in the Morrisville, Apex and Holly Springs areas to the west. Generally, these gross yield numbers show that home prices have outpaced rent increases, and rental rates could expand to increase yields.

The booming local economy will continue to expand, providing high-paying jobs and low unemployment for the foreseeable future. Favorable commercial prices, relatively low costs and taxes, ample local talent from nearby universities and affordable housing should continue to drive new businesses and residents to the area. These factors will continue to support strong demand on real estate in the area. Low rent-to-income ratios show the market is currently very affordable and has room to support above-average property value and rent price appreciation. Home values and rental prices have appreciated steadily over the last few years, but the measured increases and current relative affordability indicate a stable market, which should retain its value well. •

CONCLUSIONS The Raleigh MSA shows significant opportunity for SFR real estate investors.

Fred Heigold III is the senior data analyst at RentRange, an industry leader in market data and analytics for the single-family rental housing industry.

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