In the past decade, the single-family rental market has evolved from individual units owned and rented out by small landlords to large scale operations by big investors with significant portfolios of houses. Some of the large companies entering the market are building units specifically to rent or creating communities of single-family rentals to be professionally managed like an apartment complex.
Bloomberg‘s Patrick Clark last week tackled the topic, pointing out that single-family rentals are drawing interest from institutional money, and that builders and apartment firms are pushing into that corner of the market.
While a study last summer showed the interest in SFR has been increasing since recovery from the Great Recession, Clark’s article notes that the pandemic has ignited Americans’ desire for larger living spaces and thus sparked a new level of “Wall Street zest” for this sector of suburban real estate.
Clark notes that big investors including J.P. Morgan Chase and Nuveen Real Estate recently have bet on the supposition that “there are lots of Americans who want spare bedrooms and backyards, but don’t have cash for down payments.”
“It’s really an inflection point in SFR,” Michael Carey, Senior Director for Altus Group, an advisory firm, told Bloomberg. “It used to be an alternative asset class. Now people look at it as a solution.”
Low housing inventory means builders including Lennar Corp., the largest U.S. homebuilder by revenue, are launching campaigns of unprecedented focus on rental-specific builds.
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