Newsletters & Brand Strategy

SUBJECT LINE: YOUR GUIDE TO SINGLE FAMILY RENTAL INVESTING

TITLE: Why Single Family Rentals are Taking Over Real Estate Portfolios

EMAIL PREVIEW: Everything you need to know about a rising alternative in real estate investing

Hello Investors & Innovators,

Here’s a wild stat: Since 2020, rental prices have shot up 29.4%. While home ownership remains out of reach for many, savvy investors are turning this housing crisis into opportunity through single-family rentals. Even Jeff Bezos is getting in on the action. 

This asset class has been on the rise since the pandemic, so today we’re going to break down the ins and outs of investing in the single family home rental market. 

Why rentals are a good bet

Since 2020, rental prices have shot up 29.4%

31% of all U.S. renters are living in single-family homes

And it’s not just a pandemic anomaly: rentals have been steadily increasing over 31% over the last ten years. 

SFR incomes continue to outpace multi-family rental incomes. 

WHY SINGLE FAMILY HOME RENTALS ARE SKYROCKETING

What’s making this such a hot option?

1. A Confusing Economy: The pandemic turned many parts of the American economy on its head, especially the housing market. 

1. Record-setting prices: There’s been a fed-driven interest rates rollercoaster, home prices have skyrocketed and the costs of nearly everything associated with building or owning a house have continued to rise. 

These factors and more have left their mark on the American dream of owning a home. 

But with that dream fading away, rentals are booming. 

Bucking the Trend

We’ve all heard about the nationwide housing crisis, with demands for housing far-outpacing new construction. 

That’s true except for one category: Single-family built-for-rent (SFBFR) . 

According to the National Association of Homebuilders, SFBFR construction posted year-over-year gains in 2024 as builders looked for solutions to elevated mortgage interest rates. 

That’s what makes now a great time to invest. 

What about housing market volatility?

Investing in SFR makes for a portfolio able to withstand volatility. Remember, seasoned investors see real estate as a hedge against inflation and unpredictability in the stock market, and that’s still true in todays market. 

Why?

Home prices aren’t subject to change as quickly as a stock price can when, say, a CEO fires off an unsavory tweet. So, real estate investors must take a birds-eye view. 

While things like mortgage rates have a huge impact on the housing market, the available supply is still a long way from meeting demand, making your investment a pretty safe bet. 

What about political volatility?

You might be wondering what kind of effect the incoming president might have on the housing market. According to the Bipartisan Policy Center, regardless of who won this recent election, mortgage rates are expected to keep home ownership out of reach for most first-time buyers. 

Mortgage rates follow the 10-year treasury yield, which is hugely influenced by the federal deficit. Let’s just say there’s not too much that Trump said on the campaign trail that has anyone thinking the federal deficit is going down anytime soon…

YOU WANT IN. NOW WHAT?

Decide where you want to invest

One major factor is something we’ve heard time and time again in real estate: 

location, location and location. 

The value of property is majorly influenced by the area in which it resides. 

Some markets are seeing a boom in single family rentals because the demand is there and a steady stream of new residents is keeping the ROI high. 

Other markets (looking at you, NYC), have a regulatory environment that puts single family homes far down on the list of wise investment strategies. 

According to NerdWallet, these markets have seen the highest growth in rental markets:

Cincinnati: +9.2%

Boston: +8.7%

Louisville, KY: +8.3%

Indianapolis: +8.2%

Providence, RI: +7.8%

Browse some of these areas on Zillow and get to know what’s available in your price range. Once you have a general location, zoom in on neighborhoods. Look at things like school district data and walkability to determine where you can charge higher rents and where risk remains low. 

Once you know where, figure out your goals:

Do you want to buy existing housing or a new build?

Existing housing may require some additional investment to upgrade the property to rent for maximum profit, while some complaints about new builds include faulty craftsmanship and delayed timelines. 

Mynd is a real estate platform that assists investors in finding, buying, leasing, managing and selling investment properties

How involved do you want to be? 

Will you manage the property yourself, or outsource management?

If choosing to manage yourself, here are some technology options to make that task easier:

Yardi Breeze and Appfolio are two options that offers cloud-based property management software with many options including automating billing, maintenance and budgeting

With that said…investing in *anything* always comes with some risk

…and that includes investing in the SFR market. Here are some possible risks to be aware of:

1. There can always be hidden costs once you buy property. Any homeowner can tell you that things like leaks, pests, and things breaking happen. Those could incur surprise costs at any time.

1. Tenant issues: Depending on where your property is, nonpayment of rent can be an issue. Some localities have stricter tenant protection laws that can make it difficult to evict a non paying tenant, turning your investment into a legal headache. 

POLL

Are you interested in diving into the SFR market?

I’m interested and want to invest on my own

I’m interested, but through a diversified fund 

No, multifamily rental investing is for me

Not interested in real estate investing at all

WHAT WE’RE WATCHING

This video from Bloomberg explains why the SFR market looks particularly promising. It also goes into the reason investing in the rental market is still a good option once the Fed stops raising interest rates.  

Bloomberg: Why it May Be Time to Rent the American Dream

WHAT WE’RE READING

This article explains the data behind the rise in SFR and explores why it’s been such a hot option with investors. 

NY Post: Real Estate Investors are Quietly Scooping Up 1 in Every 6 Single Family Homes

WHAT WE’RE LISTENING TO

Josh Roche, a veteran in the office of Lloyd Capital Partners, offers practical guidance on what to expect with respect to returns with your SFR. He also gives a brief overview of the evolution of the SFR market and why it’s gaining traction.

Family Office Real Estate Insights Podcast: EP 120