Among the top 25 ZIP codes for buying single-family rentals, those with the highest potential annual gross rental yield were in metropolitan areas in Atlanta, Houston, Central Florida and Dallas, according to the Attom Data Solutions Single Family Rental Market report.
The top ZIP codes for buying-single family rentals were 30238 in the Atlanta metro area, 77373 in the Houston metro area, 34472 in the Ocala, Fla., metro area, 76140 in the Dallas-Fort Worth metro area and 30228 in the Atlanta metro area.
"This top 25 list includes ZIP codes that not only have solid rental returns and positive cash flow opportunities, but are also located in neighborhoods with relatively low vacancy rates and with home price growth and population growth, which should continue to put upward pressure on rental rates," said Daren Blomquist, senior vice president of Attom Data Solutions, in a press release.
"Nearly half of these ZIP codes, 11, have been discovered by larger investors, evidenced by an increase in the share of institutional investor purchases compared to a year ago," he continued.
Though the institutional investor purchase share for single-family homes is down nationwide, it is up in 37% of ZIP codes. Nationwide, institutional investors accounted for 2.9% of single-family homes in the third quarter, up from 2.3% quarter-over-quarter, but down from 3.1% from a year ago.
The lowest potential rental property returns were in coastal markets led by ZIP codes in the Miami, Los Angeles, Santa Barbara, Calif., New York, and San Jose, Calif., metro areas.