level / share of single-family homes that are professionally managed?
Richard Levy
Calvin Schnure
The bulk of those homes that are “professionally managed” would be those owned by institutional investors, most of which are REITs. They own something on the order of 160,000 homes, out of a much-larger 15 million or so total rentals. The SFR REITs have portfolios in the tens of thousands; most of the rest are owned by “mom & pop” or small investors.
I’d suggest two resources, one is the research paper I wrote 2+ years ago, still available on SSRN (see below). It is a bit dated in terms of numbers of homes, as the sector has continued to expand and has recently consolidated somewhat, but the business fundamentals have not changed much. Second, the National Rental Home Council (NRHC) and Green Street Advisors came out with a new piece two weeks ago—see the second link.
Finally, you can have the grad student contact me if he/she has further questions, as I continue to follow this segment and met two weeks ago with the management teams of most of the largest institutional players.
Cheers,
Calvin
Calvin Schnure
Senior Vice President, Research & Economic Analysis
NAREIT
Single Family Rentals: Demographic, Structural and Financial Forces Driving the New Business Model
National Association of Real Estate Investment Trusts®
March 31, 2014
Abstract:
The transition to a lower rate of home ownership resulted in large flows of households into rental properties. Many of these households chose to rent single family
properties, both because of the different characteristics of a single family versus a multifamily property, but also because the vacant stock of multifamily units was not sufficient to accommodate these flows in many metro areas.
The translation of housing stock from ownership to rental is not frictionless, however, and requires both capital to purchase homes for rental, and management expertise to operate the rentals. Institutional investors bought homes for rental in many MSAs where
the magnitudes of the household flows were large relative to the local pool of potential individual investors. Indicators of housing stress, including the level of shared households, households with additional adults age 35, and higher average household size,
rose more sharply during the crisis in these MSAs than the country as a whole, suggesting there was a need for even greater amounts of rental and affordable housing in these MSAs. By providing capital and management teams in these markets, these investors
may have helped prevent an even greater degree of housing stress in these cities.
Number of Pages in PDF File: 34
Keywords: Housing markets, Single Family Rental
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2418684
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Bucholtz, Shawn J
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Subject: RE: [HSUG] level / share of single-family homes that are professionally managed?