{"id":15245,"date":"2024-04-19T08:31:27","date_gmt":"2024-04-19T08:31:27","guid":{"rendered":"https:\/\/www.americamortgages.com\/?p=15245"},"modified":"2026-07-24T04:00:57","modified_gmt":"2026-07-24T04:00:57","slug":"the-average-rental-yield-in-the-u-s","status":"publish","type":"post","link":"https:\/\/www.americamortgages.com\/the-average-rental-yield-in-the-u-s\/","title":{"rendered":"Average U.S. rental yields are 8% and rising!"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">U.S. rental yields have quietly climbed to levels unseen in most developed markets, creating rare cash-flow opportunities for global investors.<\/p>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\"><strong>8% and Rising!<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That&#8217;s right! Not a typo. The average rental yield in the U.S. is 8%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is unheard of in any major country, and it is quite a shock to nearly everyone who hears this, but it&#8217;s true.<\/p>\n\n\n\n<p class=\"wRed wp-block-paragraph\">More importantly, we have a loan program specifically-created for international investors looking for an easy way to <span>qualify for a mortgage by using the rental income and not personal financials<\/span> (see below).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This article is a summary of a <a href=\"https:\/\/www.youtube.com\/watch?v=CHVSquNuwwo\" target=\"_blank\" rel=\"noopener\">presentation we made to our clients<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On a LinkedIn survey last week, we also asked the following:&nbsp;<\/p>\n\n\n\n<p class=\"m10 bRed wp-block-paragraph\"><span>What is the average rental yield in America?<\/span><\/p>\n\n\n\n<figure class=\"wp-block-table fixedTable has-small-font-size\"><table class=\"has-accent-color has-text-color has-fixed-layout\"><tbody><tr><td><strong>Range<\/strong><\/td><td><strong>Responses<\/strong><\/td><\/tr><tr><td>4% &#8211; 5%<\/td><td>57%<\/td><\/tr><tr><td>5% &#8211; 6%<\/td><td>20%<\/td><\/tr><tr><td>6% &#8211; 7%<\/td><td>9%<\/td><\/tr><tr><td>7% &#8211; 8%<\/td><td>14%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">You can see the mean expectation is 4-5%, but in fact, if I could put 3-4%, most would probably choose that, but we couldn&#8217;t put that many choices and still accommodate for 7-8%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This illustrates the fact that most investors don\u2019t realize the cash flow opportunities from investing in U.S. real estate. We want to change that perception.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Global Rental Yield Comparisons<\/strong><\/p>\n\n\n\n<p class=\"bRed wp-block-paragraph\">UAE 12.3% (Ranked #1)<br><span>USA 8.1% (Ranked #12)<\/span><\/p>\n\n\n\n<p class=\"g7 wp-block-paragraph\"><em>G7<\/em>UK 4.3% <br> Canada 3.9% <br> France 2.6% <br> Italy 4.2% <br> Germany 3.4% <br> Japan 2.4% <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As you can see, most developed countries have a rental yield lower than 4%, and half of the major Asian countries have a rental yield under 3%. Greater China countries are below 2%!&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When investing in these markets, investors \u201chope\u201d prices will rise for capital appreciation but there is little to no cash flow opportunities.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Why is the U.S. so high?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Severe Housing Shortage<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From 2012 to 2022, 6.5 million &#8216;more&#8217; households were formed compared to homes built. &#8220;Household Formation&#8221; refers to the change in the number of households (persons living under one roof or occupying a separate housing unit) from one year to the next. Let that sink in for a bit\u2026.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There is currently a 5.5M home shortage to meet existing demand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Higher labor and raw material costs with stringent zoning laws make it difficult to build homes fast enough to meet demand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Existing Home Sales<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Existing home sales normally account for 90% of total home sales.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Of the existing homeowners with a mortgage,&nbsp;<\/p>\n\n\n\n<p class=\"indent wp-block-paragraph\">\n99% are UNDER 6%<br>\n80% are UNDER 5%, and <br>\n40% are UNDER 3%<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What this means is the supply is not moving unless sellers are willing to pay capital gains or move to a higher priced home using a 1031 Exchange &#8211; regardless, they will have to face a higher mortgage rate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It&#8217;s no surprise that in 2023, existing home sales fell to the lowest level in nearly 30 years, while the median price hit a record high, according to a recent report by the <a href=\"https:\/\/www.nar.realtor\/newsroom\/existing-home-sales-slid-1-0-in-december\" target=\"_blank\" rel=\"noopener\">National Association of Realtors<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Scylla and Charybdis<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Similar to boats crossing the Straits of Messina in Homer&#8217;s Odyssey, homebuilders face a similar dilemma of whether to construct houses that buyers may not be able to afford with 7%+ mortgage rates or to hold back and therefore make long-term housing supply issues worse.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Institutional Buying<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The current lack of supply plays right into the hands of Blackstone and its peers.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Blackstone Playbook is well-known :&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Identify supply-demand imbalances<\/li>\n\n\n\n<li>Invest billions to build giant landlords<\/li>\n\n\n\n<li>Dictate rental pricing<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">January 2024, Blackstone announced the acquisition of Tricon Residential for $3.5B, making it the 3rd largest landlord (62K homes) in the U.S. behind Progress Residential (84K homes) and Invitation Homes (82K homes).&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Meanwhile, just last week, Blackstone purchased private rental housing apartment firm Air Communities for $10B in cash!&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Demand<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">COVID accelerated WFM which was growing 2.5% per year before the pandemic. It suddenly went to 100% and reversing this trend is difficult and technology has become so good that execution-based roles can be done remotely.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Meanwhile, when companies get to a certain size in expensive states such as California and New York, it becomes too expensive to live and operate a company, and many move their headquarters to a state with a lower cost of living and state taxes, like Texas. For example, Dallas has the most Fortune 500 companies in the world as their headquarters, and <a href=\"https:\/\/www.americamortgages.com\/top-landlord-friendly-u-s-states-to-own-property-in\/\">this is increasing every year<\/a>.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>U.S. Rental Yields<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here is where it gets interesting\u2026.look at some of these rental yields!<\/p>\n\n\n\n<figure class=\"wp-block-table has-small-font-size\"><table><tbody><tr><td>Detroit<\/td><td>32.9%<\/td><td>Tulsa<\/td><td>13.5%<\/td><td>Las Vegas<\/td><td>10.8%<\/td><\/tr><tr><td>Milwaukee<\/td><td>20.7%<\/td><td>Colorado Springs<\/td><td>13.2%<\/td><td>Anchorage<\/td><td>10.4%<\/td><\/tr><tr><td>Omaha<\/td><td>18.3%<\/td><td>Nashville<\/td><td>12.7%<\/td><td>Atlanta<\/td><td>10.3%<\/td><\/tr><tr><td>Baltimore<\/td><td>17.2%<\/td><td>Spokane<\/td><td>12.3%<\/td><td>Miami<\/td><td>10.1%<\/td><\/tr><tr><td>Indianapolis<\/td><td>17%<\/td><td>Madison<\/td><td>11.5%<\/td><td>Denver<\/td><td>9.5%<\/td><\/tr><tr><td>Memphis<\/td><td>15.9%<\/td><td>Tucson<\/td><td>11.4%<\/td><td><\/td><td><\/td><\/tr><tr><td>New Orleans<\/td><td>13.6%<\/td><td>Ann Arbor<\/td><td>11.1%<\/td><td><\/td><td><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">This is an illustration of what is happening due to the reasons stated above:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Unfixable housing shortage<\/li>\n\n\n\n<li>Gentrification to lower cost-of-living states<\/li>\n\n\n\n<li>Supply is further being squeezed by institutional buying<\/li>\n\n\n\n<li>Marginal homebuyer has to rent, given high mortgage rates<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">It&#8217;s never been a better time to be a landlord!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I always tell clients, if you can make the numbers work now, they will only get better because rental yields WILL RISE, and when mortgage rates decline, you can refinance to a lower rate. Over time, your net cash flow will only rise.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">More importantly, when the value of the home rises, you can refinance 70% of the increased home value to lower the investment cost!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Mortgages for International Investors<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">AM Rental Coverage+<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Our loan program was designed specifically for international investors looking for an easy way to qualify for a mortgage by using the rental income and not personal financials.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Up to 75% loan-to-value<\/li>\n\n\n\n<li>30-45 days closing<\/li>\n\n\n\n<li>If rental income > mortgage and other costs = you qualify!!<\/li>\n\n\n\n<li>No age restrictions<\/li>\n\n\n\n<li>Closing documents signed at your local U.S. embassy<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">If you\u2019re interested in learning more, reach out to us at <a href=\"mailto:hello@americamortgages.com\">hello@americamortgages.com<\/a> or visit our website at <a href=\"https:\/\/www.americamortgages.com\">www.americamortgages.com<\/a>. Additionally, if you\u2019d like to schedule a commitment-free meeting with one of our U.S. loan officers to explore your U.S. mortgage options further, you can do so using our 24\/7 calendar link.<\/p>\n\n\n\n<style>\n.g7 em{\ntext-decoration:underline;\n}\n.indent{\npadding-left:20px;\n}\ntable {\n    font-family: \"helvetica\";\n}\n.m10{\nmargin-bottom:10px!important;\n}\n.bRed span{\nfont-weight: bold;\ncolor:#cd2653;\n}\n.wRed span{\ncolor:#cd2653;\nfont-style: italic;\nfont-weight: bold;\ntext-decoration:underline;\n}\n<\/style>\n","protected":false},"excerpt":{"rendered":"<p>U.S. rental yields have quietly climbed to levels unseen in most developed markets, creating rare cash-flow opportunities for global investors. 8% and Rising! That&#8217;s right! Not a typo. The average rental yield in the U.S. is 8%. It is unheard of in any major country, and it is quite a shock to nearly everyone who [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":15256,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"templates\/template-single-post.php","format":"standard","meta":{"_acf_changed":false,"qubely_global_settings":"","qubely_interactions":"","inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[31,14,1,23,24,13],"tags":[],"am_country":[],"am_audience":[],"am_format":[],"class_list":["post-15245","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-think-pieces","category-foreign-nationals","category-loan-types","category-purchase","category-residential","category-u-s-expats"],"acf":[],"qubely_featured_image_url":{"full":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-scaled.jpg",2560,1340,false],"landscape":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-1200x750.jpg",1200,750,true],"portraits":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-540x320.jpg",540,320,true],"thumbnail":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-150x150.jpg",150,150,true],"medium":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-300x157.jpg",300,157,true],"medium_large":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-768x402.jpg",580,304,true],"large":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-1024x536.jpg",580,304,true],"1536x1536":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-1536x804.jpg",1536,804,true],"2048x2048":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-2048x1072.jpg",2048,1072,true],"qubely_landscape":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-1200x750.jpg",1200,750,true],"qubely_portrait":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-540x320.jpg",540,320,true],"qubely_thumbnail":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-140x100.jpg",140,100,true],"post-thumbnail":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-1200x628.jpg",1200,628,true],"twentytwenty-fullscreen":["https:\/\/www.americamortgages.com\/wp-content\/uploads\/2024\/04\/19-april-content-71-1980x1037.jpg",1980,1037,true]},"qubely_author":{"display_name":"Donald Klip","author_link":"https:\/\/www.americamortgages.com\/author\/donald-klip\/"},"qubely_comment":0,"qubely_category":"<a href=\"https:\/\/www.americamortgages.com\/think-pieces\/\" rel=\"category tag\">Think Pieces<\/a> <a href=\"https:\/\/www.americamortgages.com\/foreign-nationals\/\" rel=\"category tag\">Foreign Nationals<\/a> <a href=\"https:\/\/www.americamortgages.com\/loan-types\/\" rel=\"category tag\">Loan Types<\/a> <a href=\"https:\/\/www.americamortgages.com\/purchase\/\" rel=\"category tag\">Purchase<\/a> <a href=\"https:\/\/www.americamortgages.com\/residential\/\" rel=\"category tag\">Residential<\/a> <a href=\"https:\/\/www.americamortgages.com\/u-s-expats\/\" rel=\"category tag\">U.S. Expats<\/a>","qubely_excerpt":"U.S. rental yields have quietly climbed to levels unseen in most developed markets, creating rare cash-flow opportunities for global investors. 8% and Rising! That&#8217;s right! Not a typo. The average rental yield in the U.S. is 8%. It is unheard of in any major country, and it is quite a shock to nearly everyone who&hellip;","_links":{"self":[{"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/posts\/15245","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/comments?post=15245"}],"version-history":[{"count":31,"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/posts\/15245\/revisions"}],"predecessor-version":[{"id":23409,"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/posts\/15245\/revisions\/23409"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/media\/15256"}],"wp:attachment":[{"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/media?parent=15245"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/categories?post=15245"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/tags?post=15245"},{"taxonomy":"am_country","embeddable":true,"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/am_country?post=15245"},{"taxonomy":"am_audience","embeddable":true,"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/am_audience?post=15245"},{"taxonomy":"am_format","embeddable":true,"href":"https:\/\/www.americamortgages.com\/wp-json\/wp\/v2\/am_format?post=15245"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}