Growing Single-Family Rental Market Attracting Investment

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It would just make sense that with current low home prices and the housing market showing all the signs of steady growth that rental houses would make a great investment. Please read the article below and let us know what you think.

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Single family rentals appear poised to become a significant class of long-term investment asset according to a new report by financial services firm Keefe, Bruyette, and Woods (KBW). The general increase in the rental market brought on by the recession, coupled with elements of recovery such as low inventory and strong re-sales suggest that broad institutional investment in single-family rental properties could emerge as an appealing market.

“While the single-family rental market has historically been fragmented, institutional interest has increased sharply,” said Jade Rahmani, the report’s author and VP of KBW. “The large foreclosure inventory and drop in home prices have created the possibility for institutions to generate attractive cash returns of 5-7 percent and total returns including home price appreciation of over 15 percent annually.”

“We expect the large single-family rental companies to experience growth over the next 12-24 months with [the] introduction of leverage and consolidation of smaller players as potential drivers,” Rahmani continued. “We believe the sector has the potential to emerge as a long-term institutional asset class. We expect ramping lease-up capacity to drive improved occupancy, leading to positive operating income.”

To read the complete article please use the link below.

Rental Market Attracting Investment

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