The demand for single family rental homes in the metro Atlanta market is high.
We target sub-markets around Atlanta based on indicators such as job growth, population growth, transportation infrastructure, demographics, absorption studies, rent rates, and competitive housing analysis.
And you can read about recent success of build-to-rent in this AJC newspaper article by Tyler Wilkins (Nov. 26, 2021). https://www.ajc.com/news/atlanta-news/for-rent-the-american-dream/VDJLHIWO2BF43INWUZ2OXGF254/
We have heard industry experts consider Built to Rent one of the most risk averse investment sectors. One of the benefits of single-family rentals is that it has multiple exit strategies. One is to hold as a long-term rental. Another is to sell a portfolio of SFRs to an institutional buyer. A third is to sell the individual homes to owner occupants. You don’t have this third exit strategy with multi-family properties.
Single Family Rent Growth:
2017 – 2019 single family rent growth outperformed multi-family pre-pandemic. During the Pandemic in 2020 single family rent growth gap was largest. 6.3 % growth over 2021.
Zellman
Interest by Institutional Investors in Single Family Rentals:
75 billion in institutional capital announced in 2021 for single famly rentals.
Zellman
In a report by Yardi Matrix from July 2021 it is stated that “Institutions are flocking to build single-family rentals.
The Burns Single-Family Rent Index, BSFRI (Nov. 2021), by John Burns shows strong demand for single-family rentals in 2021. BSFRI lists Atlanta at number 2 behind Phoenix in their “Core 20” top SFR markets with the strongest new lease effective rent growth.
We have seen that the single family rental market has always been a large subset of the residential rental market. But after the Global Financial Crisis of 2008 is when institutions started entering into this market.
According to YardiMatrix July 2021 report:
The institutionally owned single-family rental market, formed in the ashes of the 2000s housing bubble, has been rejuvenated by COVID-19. The revival comes with a new twist: the build-to-rent segment, in which homebuilders develop single-family homes to rent.
Single-family rentals have long been a major subsection of the housing market, representing about one-third of the 46 million rental homes in the U.S. However, nearly 98% of single-family rentals are operated by momand-pop owners. Institutions did not enter the segment until after the Global Financial Crisis in 2008 and remain a small slice of the market.
Some 12% of new single-family construction in 2021 is being done for rentals, according to John Burns Real Estate Consulting.
There are some well-established reasons for the surging demand for single-family rentals, according to Chris Nebenzahl, editorial director, Yardi Matrix.
Nebenzahl also attributes the regional differences to recent migration patterns in the US, as many people have moved West and South and out of states like California, Illinois, and New York.