The newest business feature of the single-family rental market is comprised of large investors—backed by private equity—that use a buy-to-rent strategy, but how does this size up compared to professionally-managed apartment complexes and will these businesses last?
Large-scale B2R investors emerged in 2012 as a new aspect of the single-family rental business. In 2013, the single-family rental market represented a total of 35 percent of all rental housing in the U.S. Freddie Mac posed the question if large-scale buy-to-rent simply a product of the house price collapse, a one-time bargain purchase. If this is true, B2R investors may be temporary. Alternatively, if there has been a permanent shift away from home ownership toward renting and if B2R firms have developed new and more efficient ways to manage a network of single-family houses, large-scale buy-to-rent may be here to stay.
Much has been made of the economic improvements that led the Federal Reserve to raise the short-term interest rates for the first time in nearly a decade in December 2015. However, economic growth nearly ground to a halt in the Bureau of Economic Analysis “advance” estimate for the fourth quarter of 2015, coming in at an annualized rate of 0 point 7 percent in the data released on Friday. This estimate follows GDP growth of 2 point 0 percent in the third quarter and 3 point 9 percent in the second quarter.