Today’s renters are older and have children, and they want to rent homes, not apartments. Three million homeowners will become single-family home renters between 2010-2015, estimates CEO John Burns of John Burns Real Estate Consulting, and this presents a huge opportunity for individual investors and firms, reports USA Today.
Private equity firms have begun to invest in the single-family house rental asset category, and they will continue to do so over the next 5 to 10 years. Justin Chang, principal of investment firm Colony Capital, expects to see hundreds of billions invested.
In the first half of 2012, Colony Capital has purchased and converted over 1,000 houses into rental units in Arizona, California, and Nevada with plans to expand into Texas, Georgia, and Florida.
In other U.S. cities, single-family rental growth is pronounced:
- Chicago — 40.40%
- Dallas — 38.10%
- Las Vegas — 66.50%
- Phoenix — 69.80%
- Seattle — 28.90%
While the single-family rental investment is the fastest growing asset class, according to Colin Weil, co-founder of Waypoint Real Estate Group, it may not stay that way for the long-term. Burns expects that about 70% of those who lose their houses will own again.