CoreLogic touts investment returns on single-family home rentals

CoreLogic has just released its April MarketPulse report (pdf), with a raft of statistical data from February and some analytical insights that are worth a close read.

In the Chicago-Joliet-Naperville area 37.6% of sales were foreclosures or short sales in February. The House Price Index was down 1.7% month-over-month and 7.3% year-over-year. Almost one of every 9 loans, 10.7%, were 90+ days delinquent, and 24.9% were on homes with negative equity. The months’ supply of distressed homes stood at 26.3.

CoreLogic suggested that investors may see strong returns in the sizable and growing market for single-family home rentals:

Virtually all of the rental market data and analysis tracks the multifamily market, but the single-family rental market is a large, deep $3 trillion dollar market that accounts for 21 million rental units or 52 percent of the residential rental market. It is also distinct and behaves differently from the multifamily market. Whereas multifamily rents collapsed during the recession, single-family rents increased during the recession and served as a counterbalance to the struggling single-family for sale market.

According to CoreLogic, Chicago single-family rental cap rates, at 11.6%, were among the most attractive in the nation. CoreLogic found Chicago to be particularly attractive as a venue for investing in single-family rentals due to the high cap rate and its “large inventory of potential REOs (132,000), some share of which will become REO properties…”

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