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Capitalizing on Housing Market Growth

lease, single-family rentalTuesday, in an Urban Wire post [1], The Urban Institute researcher Sarah Strochak outlines why the single-family rental market is the leading segment of growth for U.S. housing. The Urban Institute recently hosted a panel discussion on the topic with Douglas Bendt from Investability, Sandeep Bordia from Amherst Capital Management, and Calvin Schnure from the National Association of Real Estate Investment Trusts (NAREIT).

NAREIT data shows that SFR space has grown about 30 percent in the past three years, compared to 15 percent growth in the multifamily sector. In comparison, the single-family owner market only began to grow again in 2016, after a seven-year decline.

The panel also explored the different landscape of the SFR space compared to the multifamily market—where institutional investors own the majority of properties. “Investability estimates that 45 percent of SFRs are owned by investors who own just one unit and that 87 percent of investors own 10 or fewer units,” the post notes.

One of the reasons that Urban Institute’s panel of experts lists for this growth is the changing demographics of the American household—including millennials waiting longer to get married and have children.

The increase in the SFR space was also recently discussed at the Single-Family Rental Roundtable at the Five Star Conference. During the event, Joakim Mortensen, Chief Client officer at CoreVest Finance gave advice for investors wanting to educate themselves on this growing area of opportunity.

“I think people are defining where and what they want to buy, what asset class and what risk profile they are looking for. So I think it is important to have events like this to educate, to see opportunities, develop new ideas, and new thoughts. Overall it’s for all of us to come together and compare notes,” said Mortensen.

The Five Star will be delving further into the opportunities the single-family rental market presents at the 2018 Single-Family Rental Summit, which will take place in Nashville March 19-21, 2018.