HouseCanary's Fourth Quarter Rental Investment Index ...s Fourth Quarter Rental Investment Index Reveals Pockets of Opportunity in the Southwest SAN FRANCISCO, January 30, 2018 —

HouseCanary's Fourth Quarter Rental Investment Index Reveals Pockets of Opportunity in the Southwest SAN FRANCISCO, January 30, 2018 — Investors looking for rental investment opportunities have to consider a

number of factors — home price, fair market rental rate, taxes, and more. The quarterly HouseCanary Rental Investment (HCRI) Index reveals not only the national rental investment average return but also showcases the

neighborhoods in each metro area where rental investors can achieve their desired return on investment.

And those neighborhoods do exist, even in metros with relatively low Effective Gross Yield (EGY), a percentage

calculation that expresses potential return on investment by accounting for the annualized fair market rent, the fair

market value of the home, and property taxes.

In the fourth quarter (Q4) of 2017, the average national EGY was 7.3 percent — but looking at specific areas of the country with a hyper-local focus shows that even in markets where overall average EGY is below that national

benchmark, there are pockets of opportunity where investors can find homes for sale with higher-than-average

EGYs.

“The markets where rental yield is either unusually high or unusually low haven’t changed significantly in the past

quarter, but our analysis shows that even in markets where EGY is average or middle-of-the-road, rental investors

can still find hidden gems that will generate better-than-average returns,” said Alex Villacorta, HouseCanary’s Executive Vice President of Analytics. “In fact, in this new normal of the housing market, all market participants will

have to be vigilant for these micro opportunities. For example, we examined five Southwest metro areas with

average or below-average EGY — Phoenix, Tucson, Las Vegas, El Paso, and Albuquerque — which are also all

markets where new opportunities exist for any investors who know exactly where to look.”

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HouseCanary Rental Investment Index

Head (South) West, Investors

The Southwest corner of the country is a prime example. Although the city centers of many metropolitan statistical

areas in the Southwest have below-average EGYs, there are still many patches of profitability outside the city

centers and even in certain blocks within the city.

Rental yields in the Southwest

Copyright © 2018 HouseCanary Inc. All rights reserved. Page 2 of 7

Above-average rental yields in the Southwest

The average EGY in Phoenix was 6 percent in Q4 — slightly below the national average of 7.3 percent. There are

some blocks in Phoenix where the average EGY is even lower than the national average, but a savvy investor

who’s looking on the right blocks in the right ZIP codes is able to find properties that can yield above the national

average EGY — sometimes more than double the national average.


Albuquerque and Santa Fe in New Mexico encompass a metro area that tells a similar story. Showing a slightly-

below-national-average collective yield of 7 percent, there are some parts of Santa Fe in particular that show yields

well below the national average – and other parts within Albuquerque’s city center where investors can find better-

than-average returns.


Rental yields in Phoenix

Rental yields in Albuquerque and Santa Fe


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In El Paso, rental yield ranges from right at the national average to higher-than-average, with an average MSA yield

of 7.8 percent. It’s generally a good place to find deals, but investors who want to get the very best return will want

to make sure they’re steering clear of the micro-neighborhoods where rental yield is lower than the national average

instead of higher.

Tucson is another patchwork, with large areas of relatively low yield bumping right up against pockets with relatively

high yield – or the other way around; there are some low-yield hyper-local parts of Tucson that are surrounded by

relatively higher-yield neighborhoods all around. The low-yield parts of Tucson pull the MSA’s average to just below

the national 7.3-percent average at 6.9 percent.

Copyright © 2018 HouseCanary Inc. All rights reserved.

Rental yields in Tucson

Rental yields in El Paso

“No matter how hot or cold a given market, there are still opportunities for investors to make substantive returns,”

noted Villacorta. “Small local investors have known for years that successful rental investments require a nuanced

approach to acquisition. Our latest data show that from Nevada to Texas, metros in the Southwest – like Phoenix

and Las Vegas – have certain hyper-local areas where rental investors can find homes that will generate higher-

than-average rental yields for them, even where home prices continue to increase.”

HouseCanary’s Value Report can help you find the hidden-gem neighborhoods in your rental investment areas –

learn more.

And even in Las Vegas – where the average rental yield is well below the national 7.3 percent average at 4.6

percent – there are parts of the city (though far fewer of them) where investors could find a higher-return deal if they happen to know which block levels to target.



Rental yields in Las Vegas

Top 50 MSAs Yield

Kansas City, MO-KS 14.1.%

Pittsburgh, PA 14.0%

Memphis, TN-MS-AR 13.3%

Birmingham-Hoover, AL 12.3%

Buffalo-Cheektowaga-Niagara Falls, NY 11.9%

Cleveland-Elyria, OH 11.0%

Indianapolis-Carmel-Anderson, IN 10.9%

Rochester, NY 10.7%

St. Louis, MO-IL 10.7%

Oklahoma City, OK 10.1%

Columbus, OH 9.8%

Cincinnati, OH-KY-IN 9.6%

New Orleans-Metairie, LA 9.3%

Louisville/Jefferson County, KY-IN 9.1%

Detroit-Warren-Dearborn, MI 9.1%

Chicago-Naperville-Elgin, IL-IN-WI 9.1%

Milwaukee-Waukesha-West Allis, WI 8.8%

Charlotte-Concord-Gastonia, NC-SC 8.6%

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 8.5%

Baltimore-Colombia-Towson, MD 8.4%

Houston-The Woodlands-Sugar Land, TX 8.4%

Jacksonville, FL 8.1%

Atlanta-Sandy Springs-Roswell, GA 7.8%

Richmond, VA 7.8%

Tampa-St. Petersburg-Clearwater, FL 7.7%

Top 50 MSAs Yield

Virginia Beach-Norfolk-Newport News, VA-NC 7.7%

San Antonio-New Braunfels, TX 7.6%

Dallas-Fort Worth-Arlington, TX 7.3%

Nashville-Davidson--Murfreesboro--Franklin, TN 7.3%

Raleigh, NC 7.1%

Minneapolis-St. Paul-Bloomington, MN-WI 6.9%

Orlando-Kissimmee-Sanford, FL 6.8%

Miami-Fort Lauderdale-West Palm Beach, FL 6.3%

Phoenix-Mesa-Scottsdale, AZ 6.1%

Denver-Aurora-Lakewood, CO 6.1%

Hartford-West Hartford-East Hartford, CT 5.9%

Providence-Warwick, RI-MA 5.8%

Austin-Round Rock, TX 5.6%

Washington-Arlington-Alexandria, DC-VA-MD-WV 5.4%

Portland-Vancouver-Hillsboro, OR-WA 5.3%

Riverside-San Bernardino-Ontario, CA 5.3%

Boston-Cambridge-Newton, MA-NH 5.1%

New York-Newark-Jersey City, NY-NJ-PA 5.0%

Sacramento--Roseville--Arden-Arcade, CA 4.8%

Seattle-Tacoma-Bellevue, WA 4.7%

Las Vegas-Henderson-Paradise, NV 4.6%

San Diego-Carlsbad, CA 4.2%

Los Angeles-Long Beach-Anaheim, CA 4.1%

San Francisco-Oakland-Hayward, CA 3.5%

San Jose-Sunnyvale-Santa Clara, CA 2.8%


Effective Gross Yield by Metropolitan Statistical Area (MSA)

Effective Gross Yields by Metropolitan Statistical Area are available for download at www.housecanary.com/rental-investment-index




Methodology

HouseCanary’s vast granular dataset of rent and home values enables the company to compute EGY at the

national, state, and ZIP code level, and for 3 million census blocks across the country. The HouseCanary Rental

Investment Index helps investors avoid the challenges traditionally presented by fractured information in the single-

family rental sector. By providing the market with a uniform, centralized index of rental yields, HouseCanary is making it easier than ever for investors to amass large-scale SFR profiles remotely and with confidence. The HCRI

Index measures Effective Gross Yield for the industry, computed as the current fair market annualized rent minus

estimated property tax, divided by the current fair market home value. Effective Gross Yield is an important

profitability metric for single-family rental home lenders and investors, who have historically only been able to

calculate gross yields for individual properties or for their own portfolio of properties.

About HouseCanary

Founded in 2014, HouseCanary’s mission is to help people make better real estate decisions. Built on a foundation

of great data, powerful models, and predictive analytics, the HouseCanary platform aggregates millions of data

elements, including more than four decades of property data and a rapidly expanding arsenal of proprietary

calculations and analytics, to accurately define and forecast values and market influences. HouseCanary is

financed by notable investors, including Hillspire (Alphabet Executive Chairman Eric Schmidt’s family office), PSP

Growth/PSP Capital (firm founded by entrepreneur and former Commerce Secretary Penny Pritzker), Alpha Edison,

ECA Ventures, Raven Ventures and other top Silicon Valley investors. The company is headquartered in San Francisco. Learn more: www.housecanary.com

Contact

For press inquiries, please contact us at [email protected] or 855.218.9597.

Questions or comments? Please contact us at [email protected] or 855.218.9597.

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HouseCanary's Fourth Quarter Rental Investment Index ...s Fourth Quarter Rental Investment Index Reveals Pockets of Opportunity in the Southwest SAN FRANCISCO, January 30, 2018 —