Morningstar Credit Ratings publishes a monthly summary report on a significant portion of the national single-family rental market. The data is not representative of the entire market. It only covers certain institutional loans securitized by residential rental properties. What is significant is the data is detailed and updated monthly. The March Single-Family Performance Summary includes approximately 86,200 properties. To view full report, click here.
The most current report summarizes March 2018 data. The data shows an average (blended rate) increase of 4.2% in tenant rents. This is a full one percent increase compared with a revised 3.2% rise in February. The trend for rising rents continues. Phoenix metropolitan statistical area (MSA) experienced the highest blended rent growth of 6.5%. The Denver-Aurora and Las Vegas MSAs both saw blended rent growth of 5.7%.
Although rents are increasing, the vacancy rate continues decreasing for a fifth consecutive month. It declined to 4.4% in March from 4.6% in February.
Renewal of expiring leases also continues to be strong. The average retention rate now stands at 75.8% (as of January, the most recent data available). Of significance to the retention rate is that rent increases tend to be higher for occupied properties than for vacant properties.
Multiborrower deals are similar to single-borrower transactions in that the underlying collateral is generally single-family rental properties. They differ, though, in that single-borrower deals are backed by one loan, while multiborrower deals have many loans.
The Morningstar Performance Summary report provides property-level performance information for all Morningstar-rated single-family rental transactions as of the April 2018 distribution date. For full report click here.
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Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for 12 years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest. With the Pacific Ocean a couple of miles in the opposite direction.