No surprise, really, that the American Dream of single family home ownership in a nice neighbourhood has always been for rent (minus the ownership portion, of course).
Homeowners can carelessly move from a job and a house they enjoy in one city, to a house and a job they enjoy in another. Reluctant to give up a cherished possession, they keep both houses and rent out one. Time passes. Other homeowners with money to spare snap up a neighbourhood house that looks like a good deal, then rent it out to make a little money.
Single family rentals (SFRs) add up over time. Prior to 2008, SFRs in America had run about 10 to 12 million million houses for 20 years. However, the foreclosures that followed the 2008 sub-prime mortgage meltdown left several million more houses in the hands of institutional lenders.
With foreclosed homeowners shifting to rental accommodation, more traditional rental apartments evaporated, even as a huge stock of empty houses weighed heavily on the hands of banks and other mortgage holders. Big bargains on single family dwellings were available.
The result today: Freddie Mac reports that 25 million of America’s 43 million renters live in an SFR.
Affordable? Quite a number of them, if you can get past the problem of more remote location, often out in the suburbs of cities, unlike more traditional high and medium rise rental buildings nestled closer to urban cores.
For more details on the rise of SFR units in America, read more in Mortgage News Daily: Single-Family Homes Now Integral to Rental Stock
With the market flooded with repossessed homes after 2008, the investment possibilities attracted larger private equity firms looking at the possibilities of owning a profitable portfolio of SFRs.
Rentals in America have changed, both the kind of rental accommodation now available, and also the aims and practices of emerging big business SFR landlords.
Those changes are not necessarily for the better. For one account, read more in the The Real Deal: After New York PE firm becomes Memphis’ biggest homeowner, evictions soar
For those with access to the Washington Post, the original investigative report was published there: Eviction filings and code complaints: What happened when a private equity firm became Memphis’s biggest homeowner
