New York City tops a new list, which may be good news or bad news depending on whether you're a landlord or renter sympathizer. With Manhattan rents plateauing and the cost of buying growing ever higher, perhaps this latest RealtyTrac listicle shouldn't come as a surprise. Manhattan, Brooklyn and Queens nabbed spots in the roundup of the worst U.S. counties for rental returns, a.k.a the worst places for landlords. In Manhattan, where the population is 1,596,735, there are 846,819 housing units, and the median sales price is $887,000. The average fair-market rent for a three-bedroom home, though, is $1,852/month (which seems low, but that's what the stats show), making the annual gross yield percentage for the landlord a mere 3 percent.
Not far behind is Brooklyn, where the population is 2,512,740 and there are 998,773 housing units, the median sales price is a more affordable $573,000. The average fair-market rent for a three-bedroom home is consistent with Manhattan's, at $1,852/month, which means the annual gross yield percentage for the landlord is 4 percent. Still not great.
As for Queens, it ranks 16th on the list of worst places for rental returns. A population of 2,235,008, coupled with 836,722 housing units, an even lower median sales price of $445,000, and the same average rent figure of $1,852, all leads to a 5 percent annual gross yield percentage.
Contrast those figures with the 16 best U.S. cities for rental returns, below, where the yield ranges from 18 to a whopping 30 percent.
RealtyTrac also made a zoomable heat map, which is handy for spotting clusters of bad-return-rate and good-return-rate cities. The coasts aren't good for landlords, whereas the Midwest seems a haven by comparison. A screenshot is pictured, but head here for the interactive version.
Realty Trac's methodology is explained further here. Thoughts on its accuracy? UPDATE: What we noted above, many readers have seized upon: using the same rent for all the boroughs is definitely not the most precise way to crunch the numbers.
· Best & Worst Markets for Rental Returns [RealtyTrac]
· Best & Worst Markets for Rental Returns: Heat Map [RealtyTrac]
· Market Reports coverage [Curbed]
· Rental Market Reports coverage [Curbed]