Trends clearly show single-family rentals will be a hot market for the foreseeable future
SVN Florida Commercial Real Estate Advisors think the time is right for clients to consider altering their CRE portfolios. If your clients have not considered investing in existing single-family rentals (SFR) or Build for Rent (BFR), it is time to show them a few opportunities.
This was a topic of discussion at the Annual IMN Single-Family Rental Conference (East) in Hollywood, Fla. SVN SFRHUB.com sponsored the two-and-a-half-day Information Management Network (IMN.org) conference, which took place in late May. It featured professionals from a wide range of specialties that include buying, building, insuring, managing, maintaining and selling SFR portfolios. With attendance exceeding 1,200, it was clear the investment segment has gained the favor of institutional and private equity.
Conference speakers raised the following points:
- The America mindset is changing. Not long ago, people looked upon renting as a transitional state on the way to home ownership. Today’s housing market reflects a new attitude. Many Millennials, Gen Z and Boomers are entirely happy with the prospects of renting over the long haul. It is simple supply and demand as we approach 50 percent of America renting. It is a fact that half of renters prefer a single-family home and the majority of the group prefers a newly constructed home.
- As Millennials uproot themselves frequently to pursue jobs in other cities, they want an easy transition. Rentals make for greater mobility and flexibility for those wishing to capitalize on employment opportunities.
- Baby Boomers are also making the switch. Having hit “empty nester” status, many no longer wish to live out their twilight years in the suburbs or in the large homes they raised their families in. They’re opting for a more urban life, lower cost and downsizing.
- Many retirees are becoming renters so they can leverage the equity in their homes to fund their travel. Boomers like the BFR product because the homes are new and the builder typically has a 10-year warranty in place for the investor/owner.
- Equity funds and investors who own SFR portfolios (typically described as five or more houses) are having little trouble raising money from Wall Street. Interest rates are historically low, so the investment is attractive even when leveraged. And if the CRE market turns a bit soft, it is relatively simple to dispose of a portfolio or even sell the homes individually. Certainly, it is easier than finding the “one buyer” for a huge office building or a partially vacant shopping center.
No one can guarantee that this new CRE investment segment will continue accelerating. But for the savvy investor, the changes mean opportunity. If you work with owners and buyers of such products, explore www.sfrhub.com for more than a billion dollars in SFR and BFR listings, including many opportunities in Florida. SVN has quickly become the market leader in this exciting CRE investment segment.