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A Bullish Market for Professional Investors in Single-Family Home Rentals?

A recent article in National Real Estate Online suggested that the market remains strong for institutional investors in single-family home real estate.

The article quoted Joseph Caruso of the National Rental Home Council (NRHC), a trade group for the single-family rental housing business. “Members of (NRHC) feel very bullish for growth over the next five years.” See the full story here.

Low Vacancy Rates

One reason to be bullish for 2017 and beyond is the low vacancy rate environment nationally. Only 4.3% single-family houses owned in the US by investors were vacant in the first quarter 2016, on average, according to RealtyTrac. “That matches the experience of NRHC members, who say their occupancy rates are in the mid-90 percent range,” according to the article.

Low Turnover

A second reason to be positive about the SFH rental market is low turnover relative to multi-family housing. “Turnover is around 30%,” according to the NRHC. “In conventional apartment communities, “ the article reported, “turnover as high as 50% is common. Single-family renters may stay longer because some have larger households and more furniture that makes moving more of an ordeal.”

Higher Rental Rates

A third reason is higher rental rates. “Rents are growing in line with individual markets,” according to NHRC members. “Several managers report rent growth as high as 4.0% to 5.0% a year, with relatively little turnover.”

Low Rates of Professional Ownership

And a fourth reason is the opportunity for experienced investors to professionalize a fragmented investor market. Individual investors currently dominate the single-family home investor landscape. As June 30, 2016, according to the article, less than 2% of the 15 million single-family houses occupied by renters - about 250,000 - were owned and managed by institutional investors.

(Institutional ownership is generally defined as a person or business entity that owns 10 or more homes in a portfolio.)

We at SpringView Investments think that now is an opportunity to professionalize the SFH market and provide affordable housing in stable neighborhoods. SpringView currently owns and manages more than 130 single-family home properties, primarily in and around Chicago.

For more information on why you should consider investing in a professionally managed portfolio of single-family homes, please contact Harold Willig at 917-209-4452 or harold.willig@springviewinvestments.com

Harold Willig is the Manager of SpringView Investment Management, LLC, which he founded in 2012. Mr. Willig also served as HFZ Capital Group’s Chief Financial Officer, and was responsible for the oversight of HFZ's Finance and Accounting team. He has over 16 years of finance and accounting experience. Mr. Willig also ran a consulting practice and provided valuation, analysis, and transactional support services to multi-billion dollar real estate companies. Previously, Mr. Willig served as the Senior Controller and Vice President of Financial Analysis and then the Chief Financial Officer of the Athena Group, a multifamily development company and fund manager.

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