Moving California Equity · Part 5 of 6
Investor Education · 5 min read
The Yield Trap
Here are the five highest county gross rental yields in the United States for 2026, per the single-family rental market report from ATTOM Data Solutions, a national property data firm:
- St. Clair County, Illinois — 14.5%
- Mobile County, Alabama — 13.6%
- Peoria County, Illinois — 12.5%
- St. Louis County, Minnesota — 11.6%
- Trumbull County, Ohio — 11.5%
If you screen on yield alone, that's your buy list. Four of those five give me serious pause, and it isn't because the yields are fake. The yields are real. The rent gets collected.
Markets are not stupid
Start from the assumption that a 14.5% gross yield exists for a reason. Capital is not shy. If a market offered a genuine 14.5% return with ordinary risk, institutional money would arrive and bid the price up until the yield came down.
So when a yield stays high for years, something is holding buyers back. Your job is to find out what, and then decide whether you're being paid enough to accept it.
Usually it's one of three things: carrying costs that eat the yield, a legal regime that prevents you from collecting it, or the market's judgment about what the asset will be worth when you want to sell.
That third one is terminal value, and it's the one that gets missed, because it doesn't show up anywhere on a monthly statement.
The specific problem
St. Clair, Peoria, Trumbull, and St. Louis County, Minnesota share a characteristic: sustained population decline in their broader regions.
A rental property is a claim on future demand for shelter in one specific location. If fewer people want to live there each year, the rent is being paid today by a tenant pool that is shrinking. You collect 14.5% annually and the asset erodes underneath you, and the erosion doesn't appear in your cash flow — it appears once, at the end, when you go to sell and discover who else wants to own a house there.
Illinois compounds it: on top of the demographics, the state carries an effective property tax of 2.01–2.08%, second highest in the nation, roughly $6,700 a year on a $333,000 home. So a chunk of that headline yield is going to the county before you touch it.
High yield in a declining market isn't free money. It's compensation for terminal-value risk, and it's priced about right.
Mobile County, Alabama is the one I'd separate out. Alabama posted +23,358 net domestic migration in 2025 — edging Florida — and carries the lowest effective property tax in the nation at 0.372%. High yield plus low carry plus in-migration is a different animal entirely. It's on my target list.
How to tell them apart
Four questions, in order:
Is the population growing? Not the state — the county and the metropolitan area. State averages hide enormous internal spreads. Ohio is the cleanest illustration: Columbus is growing with a diversified employment base while Cleveland, Toledo, and Trumbull are structurally declining. Same state score, opposite terminal values. The internal spread inside Ohio is wider than the spread between most states.
Are wages growing? ATTOM built a useful screen here: they identified 18 counties they label single-family-rental growth markets, where average wages grew over the past year and 2026 yields exceeded 10%. The largest were Suffolk County, New York; Onondaga County, New York; Lucas County, Ohio; Mobile County, Alabama; and Collier County, Florida. That's a much better starting list than a raw yield ranking, because it requires the yield to coexist with a functioning local economy. Note that two are in New York, where the landlord law will still stop you.
Is employment concentrated in one industry or one employer? A single-employer county can look fine on every metric right up until the plant closes.
Can you hire a second property manager? In most deep-value counties, no. That's part of why the yield is high, and it's a real cost.
The honest counterargument
Somebody is making money in St. Clair County right now. Probably several people.
They're local. They know the streets block by block, they have their own crews, they buy at prices that never hit a public listing, and they're underwriting a five-year cash-flow harvest rather than a twenty-year hold. For that operator the math works, and I'm not going to pretend otherwise.
But that's an operating business, not a passive allocation of California equity. It requires presence, local knowledge, and a tolerance for the exit being difficult. If you're 2,000 miles away and reading a spreadsheet, you are not that operator — you're the buyer that operator eventually sells to.
The rule I use
When the highest yields in a market sit in the emptiest counties, the yield is the warning, not the opportunity.
I'd rather take 7% in a place people are moving to than 14% in a place they're leaving. Over a twenty-year hold — which, if you're managing around the California clawback, is the hold you're planning — that isn't a close call.