While multifamily rentals have suffered during the pandemic, single-family rentals have seen record occupancy and fast rising rents. It’s a result of high single-family home prices and buyer demand for more space. Home builders and investors are pushing billions into the build-to-rent sector, reports the Wall Street Journal. One investment sales head says every institutional investor is considering build-to-rent. Historically, homes sold straight to investors advance 1% every few years, but Taylor Morrison’s rental head expects that to change to 5%. From Sept. 30, 2019 to Sept, 30, 2020, more than 50,000 homes were build-to-rent, according to John Burns Real Estate Consulting.
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Executives at LGI Homes Inc., for instance, have said that bulk sales to landlords would account for as much as 10% of the builder's 2020 home sales, or as many as 900 houses.
The build-to-rent boom was sparked a couple of years ago, when the megalandlords that emerged from the housing crisis were looking for ways to grow after they soaked up the flood of cheap foreclosures.
Big companies including American Homes 4 Rent and Tricon Residential Inc. took to buying houses on the open market. But there is competition from regular house hunters for a limited number of desirable properties at the lower end of the market.
