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Total Returns to Single Family Rentals

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  • Andrea Eisfeldt
  • Andrew Demers

Abstract

The market value of US Single Family Rental assets totals more than $2.3 trillion. We provide the first systematic analysis of total returns to Single Family Rentals in a long, broad, and granular panel. Total returns are approximately equalized across US cities at 8.5%, similar to average equity returns. On average, net rental yields and house price appreciation each contribute half total returns. However, they are negatively correlated in the cross section of cities. High-price-tier cities accrued more capital gains, while low-price-tier cities had higher net rental yields. Within cities, lower-price-tier zip codes have higher total returns.

Suggested Citation

  • Andrea Eisfeldt & Andrew Demers, 2015. "Total Returns to Single Family Rentals," NBER Working Papers 21804, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:21804
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    Cited by:

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    2. William N Goetzmann & Christophe Spaenjers & Stijn Van Nieuwerburgh, 2021. "Real and Private-Value Assets [Gendered prices]," The Review of Financial Studies, Society for Financial Studies, vol. 34(8), pages 3497-3526.
    3. Òscar Jordà & Katharina Knoll & Dmitry Kuvshinov & Moritz Schularick & Alan M Taylor, 2019. "The Rate of Return on Everything, 1870–2015," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(3), pages 1225-1298.
    4. Glenn Otto & Nigel Stapledon, 2017. "How Predictable? Rent Growth and Returns in Sydney and Melbourne Housing Markets," Discussion Papers 2017-01, School of Economics, The University of New South Wales.
    5. Ihlanfeldt, Keith & Yang, Cynthia Fan, 2021. "Single-family rentals and neighborhood racial integration✰," Journal of Housing Economics, Elsevier, vol. 53(C).
    6. Òscar Jordà & Moritz Schularick & Alan M. Taylor, 2019. "The Total Risk Premium Puzzle?," Working Paper Series 2019-10, Federal Reserve Bank of San Francisco.
    7. Lauren Lambie‐Hanson & Wenli Li & Michael Slonkosky, 2022. "Real estate investors and the U.S. housing recovery," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(6), pages 1425-1461, November.
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    9. Richard Keely & Ronan C. Lyons, 2022. "Housing Prices, Yields and Credit Conditions in Dublin since 1945," The Journal of Real Estate Finance and Economics, Springer, vol. 64(3), pages 404-439, April.

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    More about this item

    JEL classification:

    • G0 - Financial Economics - - General
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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