Baltimore is the Nation's Best Market for Renting to Millennials

• July 3rd 2014

by Lark Turner

A RealtyTrac analysis released Thursday identifies Baltimore as the most favorable city to rent to millennials. DC proper didn’t show up on the list, though it was included, along with counties in DC’s statistical area, in RealtyTrac’s total analysis.

Rental returns from millennials in the city reached an annual gross yield of 21.32 percent in 2014, the highest in the nation for the demographic, according to the analysis, though Philadelphia was a close second. The average return in the U.S. overall is more like 9.97 percent. Millennials make up about 27 percent of Baltimore’s population.

By analyzing rental data and returns in 370 counties, RealtyTrac also found that the 9.97 percent average annual return is down year-over-year. In 2013, that figure was 10.6 percent. Meanwhile, median home sales increased 7 percent in those same counties, meaning buying rental property wasn’t a great deal. RealtyTrac’s Daren Blomquist said in a statement that as a long-term investment, rental properties may still be worth it.

“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. Even so, an average annual return of nearly 10 percent 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.”

The report also looked at the best rental markets for buying properties in the U.S., and two DC-area counties made the list. Virginia’s Spotsylvania County was in the top five, with an annual rental yield of 11.86 percent. The fair-market rent for a three-bedroom there is $1,966. Maryland’s Frederick County also made the list, with a yield of 9.74 percent. Fair-market rate for a three-bedroom there is also $1,966.

RealtyTrac only looked at counties with populations of 100,000 people or more and calculated the rental returns based on a combination of government and MLS data.

Image: 3 Sons Productions/Flickr

This article originally published at https://dc.urbanturf.com/articles/blog/baltimores_the_nations_best_market_for_renting_to_millennials/8694.