Real estate investing can be both exciting and complex. With multiple factors influencing returns—rents, wages, and home prices among them—knowing where to invest, what to charge, and how to track changes over time can make a meaningful difference.
That’s where single-family rental (SFR) data comes in. This article breaks down what these reports show, why each metric matters, and how you might use the information to anticipate where trends may be headed.
1. Gross Rental Yield: A Key First Filter
Gross rental yield offers a quick way to compare income potential between markets. For example, if one county shows an 8% yield and another only 5%, that may influence where you spend time researching.
- Formula: Gross Rental Yield = (Annual Rent ÷ Property Purchase Price) × 100
- Example: Imagine two counties with similar home prices. One has rising rents and strong yields, while the other shows stagnant rents. An investor may decide that the first market deserves deeper due diligence.
Actionable steps investors could take
- Screen multiple geographies by gross rental yield to narrow down a list of potential markets.
- Use yield trends to prioritize where to perform property-level analysis.
Explore gross rental yield in your market with the Equity Trust SFR Reports.
2. Tracking Three-Bedroom Rents and Year-Over-Year Changes
Median rent values for three-bedroom homes provide insight into affordability and demand. Year-over-year (YoY) changes highlight momentum.
Why this data matters:
- Rising rents may point to strong tenant demand.
- Declining rents may suggest oversupply or affordability challenges.
Example: A city where rents increased 6% in the last year, while neighboring counties stayed flat, may indicate stronger tenant demand there.
Actionable steps investors could take
- If rents are rising steadily, an investor might explore whether the market has sustainable drivers (such as job growth, population inflows).
- If rents are falling, investors could evaluate whether to wait, negotiate more aggressively on purchase price, or focus on other markets.
3. Wages: The Tenant Affordability Factor
In its single-family rental reports, ATTOM Data Solutions integrates average weekly wage data from the Bureau of Labor Statistics (BLS).
Tenant wages determine the ability to afford rent. If wages don’t keep pace with rent increases, affordability pressure may lead to higher turnover or vacancy.
Actionable steps investors could take
- In areas where wages are rising faster than rents, tenants may be better positioned to handle modest rent increases.
- If rents are rising faster than wages, investors may decide to focus on tenant retention strategies, such as modest rent increases tied to lease renewals.
4. Median Home Prices and Year-Over-Year Changes
Median home price trends help investors understand whether a market is heating up or cooling down.
Example: If home prices in a county increased 10% YoY while rents increased 3%, gross rental yields may compress. On the other hand, if home prices remained stable while rents rose, yields may improve.
Actionable step: Compare price changes against rental and wage data before moving forward with property-level analysis.
The Power of Comparing Metrics
The real value of the SFR reports is the ability to see how data sets interact.
Home prices vs. wages
- If home prices are rising faster than wages, affordability may decline, potentially keeping more households in the rental market.
- If wages rise faster than home prices, more households could transition to ownership, reducing demand for rentals in the short term.
Actionable step: Use this comparison to gauge whether a market is more likely to see sustained renter demand or a shift toward homeownership.
Rents vs. home prices
- If rents outpace home prices, yields may improve, signaling potential for stronger cash flow.
- If home prices rise faster than rents, yields may compress, which could push investors to either negotiate purchase prices more aggressively or look elsewhere.
Actionable step: Consider whether the rent-to-price balance supports the level of yield you want to target.
Rents vs. wages
- If rents rise faster than wages, tenant affordability could become strained.
- If wages rise faster than rents, stability may increase, as tenants are better positioned to meet rent obligations.
Actionable step: Align lease renewal strategies with wage growth, ensuring long-term tenant retention.
From National to Local: Why Drilling Down Matters
One of the most powerful features of the Equity Trust SFR reports is the ability to drill down from a national overview to your state, city, or county.
Example: A national report might show stable rental growth, but within your state, one county could have double the growth rate of the average. Having visibility at multiple levels helps you align your IRA strategy with your preferred geography.
Anticipating Where Trends Are Going
Real estate markets don’t move in isolation. Major corporate expansions, infrastructure projects, and demographic shifts can reshape rental demand.
For instance, consider communities that are currently building large data centers for companies like Amazon, Microsoft, Meta Platforms, or OpenAI. These projects may bring new jobs and higher wage earners into an area. While this doesn’t guarantee an outcome, investors could ask:
- How might wages change in this market as new employers arrive?
- Will rising incomes outpace rents and home prices?
- Could demand for housing increase, and how might that impact SFR rental yields?
By framing questions around the data, investors may anticipate where trends are going rather than reacting after the fact.
Bringing It Together
Equity Trust Company, a leading self-directed IRA custodian, provides access to interactive single-family rental reports, powered by annual data from ATTOM Data Solutions. These reports bring together national and local trends in one place, helping investors evaluate opportunities. Dashboards enable you to compare key data, including:
- Gross rental yield
- Median rent values and year-over-year changes
- Wages and their relationship to rents and home prices
- Median home prices with annual trends
Ready to see the numbers for yourself? Access the single-family rental reports and start exploring the markets that matter to you.
Equity Trust Company is a directed custodian and does not provide tax, legal, or investment advice. Any information communicated by Equity Trust is for educational purposes only, and should not be construed as tax, legal, or investment advice. Whenever making an investment decision, please consult with your tax attorney or financial professional.
BiggerPockets/PassivePockets is not affiliated in any way with Equity Trust Company or any of Equity’s family of companies. Opinions or ideas expressed by BiggerPockets/PassivePockets are not necessarily those of Equity Trust Company, nor do they reflect their views or endorsement. The information provided by Equity Trust Company is for educational purposes only. Equity Trust Company, and their affiliates, representatives, and officers do not provide legal or tax advice. Investing involves risk, including possible loss of principal. Please consult your tax and legal advisors before making investment decisions. Equity Trust and Bigger Pockets/Passive Pockets may receive referral fees for any services performed as a result of being referred opportunities.
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