Carter Co. top Tri-Cities rental market in Q3, yields in all but Washington Co. higher than national average


 

By DON FENLEY

Carter County ranked as the best market for buying residential rental properties in the Tri-Cities during Q3 this year.

But based on annual gross yields things were also pretty good in Greene, Hawkins and Sullivan counties. Along with Carter they ranked a higher yield than the national average. Washington County was just under the national norm.

That assessment came from RealtyTrac’s Q3 Residential Property Rental Report.

For the report, RealtyTrac analyzed median sales prices for residential properties and average fair market rents for three bedroom properties in 586 U.S. counties. Rental returns were calculated using annual gross rental yields:  the average fair market rent of three-bedroom homes in each county, annualized, and divided by the median sales price of residential properties in the third quarter.

GROSS YIELD ON RENTALS

The 586-county analysis found that investors buying U.S. residential rental property in the third quarter of 2014 are getting an average annual return of 9.06%, down from an average annual return of 9.65% for the third quarter of 2013.

Here’s how they looked in Tri-Cities counties included in the report:

  • Carter – 14.28%.
  • Greene – 12.03%
  • Hawkins – 10.76%.
  • Sullivan – 9.31%.
  • Washington – 8.38%,

MEDIAN HOME PRICE PERFORMANCE

Median home prices in the 586 counties analyzed in the report increased more than 7% on average in the third quarter of 2014 compared to a year ago, while average fair market rents for three-bedroom homes increased an average of less than 1%.

Here’s the local median price performance:

  • Greene – up 2.51%.
  • Carter – down 1.23%.
  • Washington – down 1.23%.
  • Hawkins – down 1.47%.
  • Sullivan – down 1.47%.

About a third of housing units in the study were renter-occupied. The average national rental vacancy rate was 8.7% as of the end of 2012.

RENTAL MARKET AND VACANCY RATE

The renter and vacancy rate in the Tri-Cities was:

  • Carter – 27% renter – 7.5%.
  • Greene – 20% renter – 8.8%.
  • Hawkins – 23% renter – 5.1%.
  • Sullivan – 27% renter – 3.6%.
  • Washington – 34% – 7.8%.

 

“The single family rental market is still strong, with returns averaging 9% in the 586 counties analyzed,” said Daren Blomquist, vice president at RealtyTrac. “Even so, the market is softening, with those same 586 counties averaging a nearly 10% return a year ago.

3-BEDROOM FAIR MARKET PERFORMANCE

Fair market rental on local three-bedroom homes and change when compared to the same period last year were:

  • Carter – $883, down 1.23%.
  • Greene – $776, up 3.17%.
  • Hawkins – $807, down 1.47%.
  • Sullivan – $804, down 1.47%.
  • Washington – $883, down 1.23%.

©Don Fenley

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