SFR Market Investors Turn to Technological Advances for Competitive Edge

As the single-family rental space becomes more populated with investors, all of whom are trying to gain any advantage that will help them cut costs and streamline processes, therefore maximizing profits, more of them are turning to technology.

Many new technologies have come along just in the last few years to aid single-family rental investors with their business, and technology is expected to play an even more significant role in the SFR market going forward. That was the topic of discussion at the inaugural Five Star Institute Single-Family Rental Summit Tuesday in Las Vegas as Five Star President and CEO Ed Delgado led a general assembly discussion featuring Walter Charnoff, CEO of Investability; Gary Beasley, CEO of Roofstock; and Socrate Exantus, Owner/General Manager of All County Professional Property Management.

"A lot of technology and sophistication chased Wall Street into the space," Charnoff said. "The real estate investment sector and the real estate sector in general is one of the last great fragmented opportune markets for technology. We're going to see a lot more transaction management software, acquisition management software, and even property and asset management disposition software hit the market, and in the next few years we're going to see real estate transactions taking place significantly more online from end-to-end, but also a lot more technologies that empower and make the process of buying a home and/or holding a home and borrowing against it much, much smoother."

As further evidence that the role of technology will increase in the single-family rental space, technology services provider Altisource Porftolio Solutions on Tuesday announced the acquisition of both technology companies founded by Charnoff: RentRange, which provides rental home data and information to the financial services and real estate industries, and Investability, an online real estate search and acquisition platform. The acquisition will make RentRange's and Investability's offerings more available to a wider range of investors.

"If we can take this data and make it available to the public with a search engine that allowed them to search by their investment performance, we can help non-institutional search for real estate like institutions do, and it would be a meaningful opportunity for a massive market that's grossly underserved."

The founding of RentRange seven years ago came from the realization by Charnoff and his team that there was no decent single-family rental software product to estimate what the rent should be on a single-family home.

"Before Wall Street even entered the space, we had to build a good rental algorithm to provide a rental number for some of those other softwares," Charnoff said. "So when the market shifted and Wall Street started coming in, we were the only ones who had already collected data and figured out how to get to an accurate assessment of what the rent potential was for a single-family home."

Charnoff said that even with Wall Street's aggressive entry into the single-family rental space, he and his team came to realize that non-institutional investors, commonly called "Mom and Pop" investors, still made up a vast majority of the SFR market, and thought, "If we can take this data and make it available to the public with a search engine that allowed them to search by their investment performance, we can help non-institutional search for real estate like institutions do, and it would be a meaningful opportunity for a massive market that's grossly underserved."

Editor's note: The Five Star Institute is the parent company of DS News, DSNews.com, The MReport, and TheMReport.com.