With stock and bond market valuations at an all-time high, more and more people are turning to real estate in hopes of diversifying and securing profits.
The post-pandemic world is beginning to come into focus.
While several countries are still gaining momentum in their recovery, there is enough data for investors to plan their next moves.
Gross Domestic Product (GDP) has surged in the first quarter due to government stimulus and continued consumer spending.
While we don’t know exactly what the future might look like across the spectrum of real estate, according to a new report by Walker and Dunlop, single-family rental home growth is expected to outpace multi-family, office, retail, storage and hospitality growth through at least 2022.
Tenants who have moved away from densely-populated cities may not be eager to return and seek employment locally. Others will resume pre-pandemic lifestyles in the coming months, helping set benchmarks for housing demand.
However, many employers are already catering to employees’ demands of having a more nomadic lifestyle…
…Add to that the looming prospect of asset inflation, diminished inventory and ultra-low interest rates, it’s no wonder that consumers and investors alike are clamoring to purchase Single Family Rental Homes (SFRs).
As the demand for the SFR asset-class continues, institutional investment capital in search of yield is demanding a seat at the table as well.
In the past, the nature of buying, owning and operating SFRs has kept these institutions from being involved. Currently, institutional investors comprise less than 2% of the SFR market as compared to 55% ownership in the multi-family space.
Institutional capital is also flocking to the new “build-for-rent” (BFR) space as well. BFRs are homes that are operated as single-family rental investments, similar to traditional multifamily housing.BFR is a relatively new concept and comprises only 5% of new homes built.
That said, single family rental homes are rapidly becoming an asset class on par with the more traditional sectors such as multifamily, retail and office space.
In fact, one of the nation’s largest homebuilders Lennar recently launched a $4 Billion single family rental platform as they seek to not only sell homes but make them available for rent as well.
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