Single-family rental (SFR) investment is poised to be an investment portfolio stand out, according to SVN | SFRhub Advisors. The company recorded a 650% uptick in investment activity since mid-March 2020 for SFR/BFR portfolios on their technology platform, SFRhub.com, averaging 10,000+ listed homes, Yahoo Finance [1] reports.
"Investors have reaped financial advantages of a 10-year bullish marketplace, notably the past few years with SFR portfolios, and the newer BFR market," said Jeff Cline, Executive Director and Principal of SVN | SFRhub Advisors [2]. "For the first time in U.S. history, rental household growth outpaced U.S. homeownership."
He added "Looking ahead, consumer economic, lifestyle, and work-at-home popularity indicate global investors’ near and long-term outlook for capital growth and income opportunities in single-family detached homes for rent is better than it’s been for several years."
According to SVN | SFRhub, demand from millennials and older adults/retirees has destigmatized renting and touted SFRs' benefits like increased space, yards and amenities representative of living in a single-family detached home. Skyrocketing unemployment, job uncertainty, and hefty student debt loans imply the SFR/BFR market should remain strong among millennials as home ownership moves farther out in time and remote working becomes more popular.
Cline notes, "SFR/BFR investors' main concerns are rent revenue and occupancy. In the short-term, unemployment may impact rent rather than occupancy issues. As the economy recovers, demand for SFR/BFR will be a favorite among alternative investors with capital on the sidelines seeking refuge and stock market diversification for growth and income."
U.S homebuilders may turn to REITs, private equity firms and individual investors to purchase completed or near completed single-family communities for rental investment if the new home buyer market continues to retract.
"For the first time, we now have several private capital group clients with tens of billions of dollars to specifically invest in the BFR space," said Michael Finch, EVP of SVN | SFRhub Advisors.