The government has begun subsidizing the institutionalized single-family rental market, signaling an endorsement of Wall Street’s buy-to-rent housing bet as homeownership lags.
It’s no secret that inadequate inventories have been stunting the housing recovery. Through November, total housing inventory has fallen year-over-year for 18 straight months and supplies are now 11.4 percent lower than they were two years ago.
After purchasing tens of thousands of homes at post-recession prices, Blackstone Group LP — the biggest U.S. single-family home landlord — is taking Invitation Homes, its single-family rental unit, public.
Five years ago, more than a dozen Wall Street hedge funds and real estate investment trusted armed with fistfuls of cash made plans to hijack the single family rental boom by spending billions to buy up thousands of foreclosures at fire sale prices.
Roofstock, a website that lets investors find and purchase tenant-occupied single-family rental homes online, is offering a 1 percent referral fee to real estate agents for referring an investor who buys any of the properties listed on its site. The startup posts exclusive listings owned by institutional investors that have snapped up single-family rentals homes en masse and are now seeking to offload them.
An upgrade to MLS data app Homesnap indicates that more agents and investors want access to single-family rental home information, specifically rental data focused on properties’ cash flow potential. Agents that operate in Homesnap’s “Pro markets” can now search single-family rentals, along with townhouses and condos, and share that information with clients looking to purchase investment properties.
Recently, there has been a spate of reports that seem to bear this out. According to The State of the Nation’s Housing 2015, a report released by Harvard University’s Joint Center for Housing Studies (JCHS), the national homeownership rate fell for the 10th consecutive year in 2014, to 64.5 percent, while renter households rose to a 20-year high of 35.5 percent.
Real estate agents looking to turn renters into buyers might want to focus on a specific sub-set of renters: those renting single-family homes. Households or individuals renting single-family properties — homes, condominiums and townhomes — are more likely to buy than those in apartments, according to research from Freddie Mac
CoreLogic has upgraded its Rent Amount Model to include a cap rate calculator that enables investors and specialized lenders to estimate the rate of return on single-family rentals.
America’s No. 1 homeowner is not an owner-occupant, but one of the world’s largest and most successful private equity companies — Blackstone Group. In the past couple of years, as the pace of Blackstone’s acquisitions has slowed, some have speculated that the trend is winding down, but it’s not. It’s just shifting form.
In the last three years, a new class of homeowner entered our business. They are the largest in history, and they represent the beginning of something much more important to come.