Single-Family Rentals on Steroids
How investors are enhancing yields via new consumer financial products and operating models.
The single-family rental industry, once seen as a straightforward proposition, is undergoing a period of rapid innovation.
As the global economy shifts, and as Americans’ perspectives on home ownership, investment, and community change, niche business models—like rent-to-own, shared appreciation, and co-living—are growing in popularity.
But these models are not only helping consumers.
They are also helping institutional SFR investors struggling to find acceptable risk adjusted returns for single-family acquisitions or developments in the current interest rate environment. In the first quarter of 2023, Invitation Homes had a net absorption of -103 homes (i.e., they bought 194 and sold off 297) compared to +675 in the first quarter of 2022.
So to start buying again, institutional groups are turning to niche models to enhance their investments.
In this article we’ll highlight:
Why SFR investors are currently on the sidelines
Owner Incentive models, and how investors can leverage them to acquire homes
Investor-Renter Partnership models, and how investors can enhance and secure income
New Operating & Niche Market models, and how they generate premium returns
Current adoption of these models, and what’s next?