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Single Family Rentals
By Erica Rascón on Jul 8, 2021 in Matrix
Is there a market for renters who want it all? Privacy, outdoor living space, a manicured lawn and financial flexibility are available to renters of single-family homes. Research reveals that interest in single family rentals has been growing since the Great Recession. The pandemic further ignited demand, as demonstrated by a surge in the construction of single-family rentals.
As the market develops, specialized technology is necessary for smart growth.
Industry powerhouses set their sights on single-family rentals
In mid-2020, the first wave of institutional buyers made their mark on the industry. During Q1 2021, they continued the trend by purchasing nearly 55,000 homes, according to Redfin data.
Built-to-rent single family homes are also taking off. New York-based Trepp real estate analytics firm reports a 66% increase in single-family homes built to rent. Both homebuilders and apartment companies are entering the market.
Builders such as Lennar Corp., the largest homebuilder in the nation by revenue, and multifamily behemoth Greystar Real Estate Partners are investing in single-family houses. Mike Clow, executive director at Greystar, aims to increase investment in the division by a noteworthy 1,566.66% percent by 2026. Operator Invitation Homes announced that it will spend $1 billion in single-family home acquisition in 2021, per an interview with Business Insider.
While major players are pumping major dollars into the sector, small landlords still own the majority of single-family rentals. Only about 6% of new homes are built-to-rent.
Single-family rental data by Yardi Matrix
The demand for single-family rentals is reflected in the strength of rents and occupancy. Yardi Matrix reporting now includes insights into built-to-rent single-family communities. Data is compiled from more than 90,000 units in 700 communities nationwide.
Single-family rentals (SFR) thrived during the pandemic. The industry recorded a powerful 7.3% year-over-year (YoY) rent growth as of May 2021. This reflects an overall rent increase of about $14 in May to $1,761.
National occupancy rates of 96.6% in April (a 1.5% increase from a year ago) demonstrate the continuing strength of the market. The Inland Empire lead in rent growth, reporting an 18.3% increase YoY. Phoenix and Denver also performed well at 15.3% and 13.5%, respectively.
Learn more about the Yardi Matrix multifamily and single-family rental reports.
Managing single family rental communities
Built-to-rent single-family homes are a relatively new sector. Industry professionals are still developing their best practices for management.
Many pioneers blend the roles of property management and a homeowner association. Routine maintenance, repairs and landscaping are all handled by the organization. Multifamily property management software, however, faces major limitations when applied to single-family homes.
Designated single-family rental management software empowers property managers with the tools necessary to efficiently operate their communities.
- Centralized data provides transparency for smarter business decisions.
- Comprehensive financial management includes a robust reporting system while meeting GAAP and IFRS requirements.
- Automation streamlines resident data management from guest card to move out, reducing redundant data entry and errors.
Single-family rentals require tailored solutions for complete visibility and control. Through technology, managers can optimize efficiency and scale and meet the nation’s growing demand.
Get the smart guide for choosing property management software.
