) -- Investors who have been buying up single-family homes to capitalize on demand for rentals are starting to see rents flatten in several key markets.

According to online real estate firm Trulia's Price/Rent Monitor released Thursday, rents are falling or flat in Las Vegas, Orange County, Los Angeles, Atlanta and Phoenix -- all markets where big investors have been particularly active in buying and renting out homes, which has eased the rental shortage in these markets.

"Nearly 4 million more single-family homes have been added to the rental market since 2005. This new supply has fully caught up with the increased rental demand during the housing crisis - causing single-family home rents to flatten nationwide," the report noted.

Nationally rents rose 2.4% year-on-year in March, with single-family rents rising only 0.1% year-on-year. The flattening in rents coincides with rising home prices.

In Las Vegas for instance, rents are down 1.9% year-on-year, while asking home prices - which is a good predictor of future sale prices -- are up nearly 25%. Even in single-family rental markets where rents are up, such as in Tampa and Dallas, asking prices rose much faster than rents, the report noted.

If this trend continues, it could be a game-changer for investors in the single-family rental business. Players such as


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have been rapidly buying foreclosed homes and converting them into rentals on the premise that cheap home prices and rising rents could translate into attractive yields.

That could change.

"Rising prices and flattening rents change the math for investors and renters," said Jed Kolko, Trulia's Chief Economist. "Some investors will decide to sell the units they've been renting out, which would create new desperately needed for-sale inventory."

Nationally, asking prices were up 1.1% month-on-month in March on a seasonally-adjusted basis. Excluding foreclosures, sellers raised their ask price by 1.4%. Year-on-year, asking home prices are up 7.2% or by 8% excluding foreclosures.

Some renters watching prices rise will rush to buy before prices rise further, but those who don't will at least get some relief from stabilizing rents."

-- Written by Shanthi Bharatwaj New York.

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