By now most everyone knows that the institutionalization of the single-family rental (SFR) market is a permanent trend. The pioneers in the sector set out to prove that America’s most fundamental real estate asset class could be tamed, and they succeeded. The returns that large-scale SFR is producing is now measuring up to institutional standards and the management is under control. It wasn’t pretty, but the naysayers who said it was impossible to operate massive national rental portfolios have been proven wrong. The results are in, and the institutional investment world loves SFR.
Ever since the initial public offering for Blackstone’s Invitation Homes with Fannie Mae’s backing, opinions have been circulating regarding the Single-Family Rental market. One of particular interest is that of the National Association of Realtors.
To quote HousingWire, “NAR made its stance on investors clear on several occasions: Investors are creating more competition for first-time homebuyers, possibly even keeping them from homeownership.”
NAR President William Brown wrote a letter to Mel Watt, Director of the Federal Housing Finance Agency, making it clear he believes Fannie Mae’s involvement is only assisting large institutions to compete with homebuyers. He goes on his letter to state that, “investors drive up the price of rents and remove affordable inventory from the hands of American homeowners.”
I saw some interesting research recently from a few credible sources that retold an old and familiar story: investors across the world are attracted to residential real estate in the US, and many are actively doing something about it. However, what the research leaves out is now many potential investors don't take action because the bridge from there to here is so rickety.
According to an Asia Society Special Report, Chinese investment in residential property amounted to $93 billion between 2010 and 2015, while commercial investment saw just $17.1 billion over the same period. And what are these investors buying? Luxury condos in gateway cities and second homes. Negative cash flow investments that will not product income, but will preserve and grow their capital (as well as get it out of their country).
CEO Greg Rand Addresses IMN 5th Annual SFR Investment Forum
A pioneer in bringing technology and services to the institutional Single-Family Rental (SFR) market OwnAmerica CEO, Greg Rand, spoke today at the IMN 5th Annual SFR Investment Forum in Phoenix. He shared his views on what the Trump Administration will mean for the SFR market, and how changing demographics and evolving sales practices are changing the market.
Highlights of Rand’s presentation: