HomeUnion Names the Housing Markets with the Best and Worst Returns

As of mid-year, Cleveland properties had the best returns, while San Francisco had the worst returns

IRVINE, Calif., July 28, 2016 – HomeUnion, an online residential real estate investment management firm, has released a list of the 10 best and worst markets for returns on single-family rental (SFR) properties. The lists analyze first-year SFR returns, or cap rates, in each market. The cap rate is the relationship between an investment property’s net operating income (rents minus expenses) and the market value of the property.

“Through midyear, owners of SFR investment properties benefited from healthy returns in many markets nationwide, but especially in markets located in the Midwest and Southeast,” says Steve Hovland, director of research services at HomeUnion. “SFRs are outperforming many other investment vehicles, including bonds and gold. As interest rates remain low after the June Brexit vote placed downward pressure on U.S. treasuries, bonds and other investments will continue to be low yielding assets. Investment real estate has proven to be a successful part of a diversified portfolio, and these markets offer the largest returns.”

Here’s a list of the 10 highest-yielding markets to invest in SFRs:

Rank Metro Area Cap Rate (%)
1 Cleveland 11.1
2 Columbia, SC 9.7
3 Birmingham, AL 8.5
4 Pittsburgh 8.4
5 Milwaukee 8.4
6 Cincinnati 8.2
7 Memphis 8
8 Greenville, SC 8
9 Tampa 8
10 Philadelphia 8

Here’s a list of the 10 lowest-yielding markets to invest in SFRs:

Rank Metro Area Cap Rate (%)
1 San Francisco 2.5
2 San Jose, CA 2.6
3 Orange County 2.7
4 Los Angeles 3.1
5 San Diego 3.5
6 Oakland, CA 3.5
7 New York 3.5
8 Seattle 3.5
9 Sacramento 3.7
10 Portland, OR 3.8

“On the other hand, these markets don’t offer such great returns,” Hovland notes. “If an investor’s horizon is long term, these coastal markets might be worth exploring, but the ROI won’t be as immediate as it will in the Heartland.”



About HomeUnion

HomeUnion is an online real estate investment management firm. Based in Irvine, Calif., it provides all the services needed for individuals to invest remotely in SFR properties. The company uses a combination of research and data-driven proprietary analytics to incorporate over 120 million homes and 200,000 neighborhoods into their database, and then delivers its solutions to an on-the-ground infrastructure that currently serves 21 locations. HomeUnion’s role spans the lifecycle of the investment transaction: from identifying sound investments, handling all aspects of acquisition, maximizing income, protecting asset value, and selling it when the time comes.


Media Contact:

Stacey Corso, Communications Manager

HomeUnion, Inc.



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