HouseCanary's Fourth Quarter Rental Investment Index ...s Fourth Quarter Rental Investment Index Reveals Pockets of Opportunity in the Southwest SAN FRANCISCO, January 30, 2018 —
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HouseCanary's Fourth Quarter Rental Investment Index Reveals Pockets of Opportunity in the Southwest SAN FRANCISCO, January 30, 2018 — Investors looking for rental investment opportunities have to consider a
number of factors — home price, fair market rental rate, taxes, and more. The quarterly HouseCanary Rental Investment (HCRI) Index reveals not only the national rental investment average return but also showcases the
neighborhoods in each metro area where rental investors can achieve their desired return on investment.
And those neighborhoods do exist, even in metros with relatively low Effective Gross Yield (EGY), a percentage
calculation that expresses potential return on investment by accounting for the annualized fair market rent, the fair
market value of the home, and property taxes.
In the fourth quarter (Q4) of 2017, the average national EGY was 7.3 percent — but looking at specific areas of the country with a hyper-local focus shows that even in markets where overall average EGY is below that national
benchmark, there are pockets of opportunity where investors can find homes for sale with higher-than-average
EGYs.
“The markets where rental yield is either unusually high or unusually low haven’t changed significantly in the past
quarter, but our analysis shows that even in markets where EGY is average or middle-of-the-road, rental investors
can still find hidden gems that will generate better-than-average returns,” said Alex Villacorta, HouseCanary’s Executive Vice President of Analytics. “In fact, in this new normal of the housing market, all market participants will
have to be vigilant for these micro opportunities. For example, we examined five Southwest metro areas with
average or below-average EGY — Phoenix, Tucson, Las Vegas, El Paso, and Albuquerque — which are also all
markets where new opportunities exist for any investors who know exactly where to look.”
“No matter how hot or cold a given market, there are still opportunities for investors to make substantive returns,”
noted Villacorta. “Small local investors have known for years that successful rental investments require a nuanced
approach to acquisition. Our latest data show that from Nevada to Texas, metros in the Southwest – like Phoenix
and Las Vegas – have certain hyper-local areas where rental investors can find homes that will generate higher-
than-average rental yields for them, even where home prices continue to increase.”
HouseCanary’s Value Report can help you find the hidden-gem neighborhoods in your rental investment areas –
learn more.
And even in Las Vegas – where the average rental yield is well below the national 7.3 percent average at 4.6
percent – there are parts of the city (though far fewer of them) where investors could find a higher-return deal if they happen to know which block levels to target.
HouseCanary’s vast granular dataset of rent and home values enables the company to compute EGY at the
national, state, and ZIP code level, and for 3 million census blocks across the country. The HouseCanary Rental
Investment Index helps investors avoid the challenges traditionally presented by fractured information in the single-
family rental sector. By providing the market with a uniform, centralized index of rental yields, HouseCanary is making it easier than ever for investors to amass large-scale SFR profiles remotely and with confidence. The HCRI
Index measures Effective Gross Yield for the industry, computed as the current fair market annualized rent minus
estimated property tax, divided by the current fair market home value. Effective Gross Yield is an important
profitability metric for single-family rental home lenders and investors, who have historically only been able to
calculate gross yields for individual properties or for their own portfolio of properties.
About HouseCanary
Founded in 2014, HouseCanary’s mission is to help people make better real estate decisions. Built on a foundation
of great data, powerful models, and predictive analytics, the HouseCanary platform aggregates millions of data
elements, including more than four decades of property data and a rapidly expanding arsenal of proprietary
calculations and analytics, to accurately define and forecast values and market influences. HouseCanary is
financed by notable investors, including Hillspire (Alphabet Executive Chairman Eric Schmidt’s family office), PSP
Growth/PSP Capital (firm founded by entrepreneur and former Commerce Secretary Penny Pritzker), Alpha Edison,
ECA Ventures, Raven Ventures and other top Silicon Valley investors. The company is headquartered in San Francisco. Learn more: www.housecanary.com
Contact
For press inquiries, please contact us at [email protected] or 855.218.9597.
Questions or comments? Please contact us at [email protected] or 855.218.9597.