Demand for single-family rentals is heating up, and is now the fastest growing segment of the housing market. Data from CoreLogic’s [1] 2018 SFR report indicates that its single-family rental index increased 4.1% since January 2018, noting that low rental home inventory, relative to demand is fueling the growth of single-family rent prices.
In response, many homebuilders are turning to build-for-rent properties, CNBC reports. [2]
AHV Communities, partnering with Bristol Group, is one builder turning from for sale homes to build for rent. CNBC reports that the company is putting up 250 new detached homes in San Antonio’s Pradera neighborhood, where rents range from about $1,800 to $2,300 per month.
“We basically took an apartment and went horizontal instead of vertical,” AHV founder and CEO Mark Wolf said on CNBC. “About 93% of the apartment stock consists of studios, one and two bedrooms, very few three bedrooms. We saw a growing need coming out of the downturn, to provide three- and four-bedroom homes to the renter society.”
“We think there’s a major shift in the demographics,” Wolf added. “Empty nesters are done taking care of their homes. They want to downsize, they want portability, mobility in the lease. The millennial household formation, they’re not really dialed into taking care of a home, they want to go out and do the same thing that the boomers are doing, which is enjoy life, not work hard for their house.”
According to CNBC, builders are finding single family starter homes difficult to profit from, as costs have risen and regulation has tightened.
“Our business is booming right now with build-to-rent feasibility work,” said John Burns, founder and CEO of John Burns Real Estate Consulting. “We are discussing new projects with clients almost daily. The market has become so hot that we are already having conversations about when we will conclude the market is overbuilt.”
Learn more about single-family rental investment at the Five Star Conference Single Family Rental and Investment Roundtable, to be held on Monday, September 23 at the Hyatt Regency Dallas, moderated by RCN Capital CEO Jeffrey Tesch. Grab a seat at the table to hear what opportunities are available to help you meet your investment objectives. Hear from industry experts on how you can continue to meet your performance objectives. Participating companies include:
- Bayview Loan Servicing
- CoreVest Finance
- Home Depot
- National Tax Search
- RCN Capital
- and more
Learn more about the Single Family Rental and Investment Roundtable here. [3]