Best Places to Invest in Single-Family Rentals in 2025
Are you considering investing in single-family rentals (SFRs) in 2025? Based on the latest report from ATTOM, we’ve compiled a list of the top ten counties that present lucrative opportunities for SFR investments. These areas are characterized by substantial wage growth and attractive rental yields. Let’s explore which counties made the cut and why they are advantageous for real estate investors.
Why Invest in Single-Family Rentals?
Single-family rentals have become a popular choice for investors due to several compelling benefits:
- Consistent Cash Flow: Rental income offers a reliable revenue stream.
- Appreciation Potential: Real estate generally appreciates in value over time.
- Tax Advantages: Many expenses, including depreciation and mortgage interest, can be tax-deductible.
- Tangible Asset: Unlike stocks or bonds, SFRs are physical assets that you can manage directly.
However, choosing the right market is crucial. Factors such as job growth, population changes, affordability, and local regulations can greatly influence the potential profitability of your investment.
The Big Picture: Rental Yields in 2025
According to ATTOM’s Q1 2025 Single-Family Rental Market Report, the projected annual gross rental yield for three-bedroom properties is 7.45%. Although this is a reasonable return, it represents a slight decrease from the 2024 average of 7.52%.
- Key Takeaway: Nearly 60% of the counties analyzed are expected to see a decline in rental yields due to rising home prices outpacing rent increases.
Criteria for Selecting the Top 10 Counties
To determine the best counties for SFR investments, ATTOM focused on:
- Positive Wage Growth: Indicates economic health and renters’ capacity to afford higher rents.
- High Projected Rental Yields: A higher rental yield equates to better investment returns.
Out of all the areas analyzed, ATTOM identified 28 “SFR Growth” counties where average wages have risen over the past year, and projected rental yields exceed 10% for three-bedroom properties in 2025.
Top 10 Counties for Single-Family Rentals in 2025
Now, let’s delve into the specific counties that have been identified as prime investment locations:
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Suffolk County, NY
- Year-over-Year Wage Growth: 7%
- Annual Gross Rental Yield: 18%
- Why It’s Great: This county benefits from proximity to New York City while offering affordable housing options, making it attractive for SFR investors.
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Atlantic County, NJ
- Year-over-Year Wage Growth: 2%
- Annual Gross Rental Yield: 18%
- Why It’s Great: Beyond Atlantic City, this region offers numerous rental opportunities.
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Jefferson County, AL
- Year-over-Year Wage Growth: 9%
- Annual Gross Rental Yield: 16%
- Why It’s Great: Home to Birmingham, this county features a growing economy and population.
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Mobile County, AL
- Year-over-Year Wage Growth: 5%
- Annual Gross Rental Yield: 19%
- Why It’s Great: The economy is bolstered by industries like aerospace and manufacturing.
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Ector County, TX
- Year-over-Year Wage Growth: 5%
- Annual Gross Rental Yield: 15%
- Why It’s Great: Known for its strong job market in the oil and gas industry.
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Indian River County, FL
- Year-over-Year Wage Growth: 2%
- Annual Gross Rental Yield: 12%
- Why It’s Great: Known for tourism, it shows potential despite slower wage growth.
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St. Louis City, MO
- Year-over-Year Wage Growth: 7%
- Annual Gross Rental Yield: 12%
- Why It’s Great: Combines affordable living, cultural attractions, and job opportunities.
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Litchfield County, CT
- Year-over-Year Wage Growth: Not Specified
- Annual Gross Rental Yield: 17%
- Why It’s Great: Offers a rural feel with proximity to urban centers.
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Charlotte County, FL
- Year-over-Year Wage Growth: 4%
- Annual Gross Rental Yield: 16%
- Why It’s Great: Attracts tourists and retirees alike, presenting a solid investment landscape.
- Saint Clair County, IL
- Year-over-Year Wage Growth: 8%
- Annual Gross Rental Yield: 16%
- Why It’s Great: Benefits from a robust regional economy and job market.
Conducting Due Diligence
Although these counties present promising opportunities, keep in mind that real estate investments are not without risks. Here are critical steps to carry out your due diligence:
- Analyze Local Market Conditions: Examine vacancy rates, average rents, and property values in your target neighborhoods.
- Evaluate Property Condition: Ensure thorough inspections for repairs and maintenance issues.
- Understand Local Regulations: Familiarize yourself with zoning laws and landlord-tenant regulations.
- Assess Risk Tolerance: Determine your risk threshold to make informed investment choices.
Conclusion
Investing in single-family rentals offers a valuable path to wealth creation and passive income generation. The counties highlighted in ATTOM’s report for 2025 offer a solid mix of wage growth and rental yields. However, always conduct comprehensive research and consult with real estate professionals before making significant investment decisions.
By carefully analyzing market trends and aligning them with your investment goals, you can enhance your opportunities for success in the real estate market.
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