Alex Pettee, CFA
Single-Family Rentals: Millennials Knocking On The Door
Millennials - the largest generation in American history - are coming full-steam into the single-family housing markets over the next decade amid a period of historically low housing supply.
For the "Renter Nation" generation, single-family rentals have become the new "starter homes." Technology and scale have enabled single-family rental REITs to crack the code to profitably manage rental homes.
Happy residents, happy investors. Single-family rental REITs have surged more than 40% in 2019 as turnover continues to reach new historic lows even as rent growth reaccelerates.
Rising property taxes, however, continue to pressure margins. Moderating home price appreciation has been welcome news from both an expense and acquisition standpoint.
Homebuilder or REIT? SFR REITs have turned to internal development as a channel to fuel external growth as the lines between homebuilder and single-family rental operator get increasingly blurred.