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IRVINE, CA—Investors are challenged to achieve the rentalreturns of the past due to ever-increasing home prices, saysRealtyTrac's VP Daren Blomquist.In a recent 370-county analysis, the firm found thatinvestors buying US residential rentalproperty in the second quarter of 2014 are getting anaverage annual return of 9.97%, down from an average annual returnof 10.6% a year ago.

“Home prices have increased at a faster pace than fair marketrents in most counties over the past year, eroding the averagereturns available to investors buying rental properties,” saysBlomquist. “Even so, an average annual return of nearly 1% acrossall the counties we analyzed nationwide is still solid, andinvestors holding on to rental property for the long term will alsotypically benefit from home price appreciation on top of the annualreturns from rental income.”