Total Returns to Single Family Rentals

The market value of US Single Family Rental assets totals more than $2.3 trillion. We believe that we provide the first systematic analysis of total returns to Single Family Rentals over a long time period, in a broad and granular cross section. We find that total nominal returns are approximately equalized across US cities, at about 8.5%, the same order of magnitude as equity returns. On average, net rental yields and house price appreciation have each contributed around half of the 8.5% total return. However, these two components are negatively correlated in the cross section. High price tier cities accrued more capital gains, while low price tier cities had higher net rental yields. Within cities, we show that lower-price-tier zip codes have higher total returns as a result of both higher yields and higher house price appreciation.