While investors in the single-family rental sector are enjoying healthy demand for their product, the historically long U.S. housing boom underway has made most high-yielding investment opportunities a thing of the past.
"A lot of investors are actually probably hungry for a little bit of a correction in the market so they can start acquiring again," Daren Blomquist, ATTOM Data Solutions' senior vice president for communications said at the IMN Single Family Rental Investment Forum West in Phoenix.
Investment sentiment in the single-family sector is likely to remain strong for the next one to two years, Blomquist said, adding that external shocks to the U.S. economy, such as a recession or a war with North Korea, are likely the only scenarios capable of significantly derailing the rental-homes sector in the near term.
Amherst Capital Management director Jasraj Vaidya said the current investment climate in the single-family rental sector is "tough," with low yields and an undersupply of homes, but investments in technology and infrastructure should allow institutional investors to increase their share of the market from 2% to as much as 10% over the next five to 10 years.
Many potential homeowners are still being shut out of the home buying market for a host of reasons, including a shortage of affordable starter homes, low wages, student loan debt and increasing healthcare costs, Blomquist said.
Gary Beasley, CEO and co-founder of Roofstock, an online marketplace for single-family rental properties, said that while U.S. home prices declined between 2007 and 2012, average rents held steady.
"As we look at the next correction, it’s a pretty interesting place to have capital," Beasley said of the sector. "Because unless you need to refinance or sell during a downturn, it's a great time to add to your portfolio."
