Single-Family Rental Operators and Investors
John Burns Real Estate Consulting works with many of the largest single-family rental operators and their investors.
- MSA rankings. We developed a methodology to rank metropolitan statistical areas (MSAs) based on the potential for successfully acquiring and renting single-family rental homes. Our team analyzes over 50 categories of historical and projected demand, supply, and housing-related factors.
- Zip code ranking and price forecasting. Within an MSA, we can dive down to the zip code level, so clients can make more informed capital allocation decisions. We also create a future resale price forecast by zip code, so that our clients can consider future price changes in their underwriting.
- Financial modeling and valuation. Our cash flow models help value portfolios of assets or loans and includes our pricing forecasts with operating expenses and rehabilitation costs. The model offers tremendous flexibility to run sensitivity analyses.
- Capital raising. We have supported several capital-raising efforts through initial public offerings and private placement memorandums by providing a historical perspective and our forecast of economic and housing related trends that will impact the single-family rental business.
Research subscribers receive regular market updates as well as the following reports specifically geared to the single-family rental industry.
Our firm was at the forefront of this industry, evaluating the market and looking at single-family rentals as an alternative to get through the housing market recession.
- In February 2009, we wrote “Unlocking the Housing Market,” a pro bono white paper suggesting policies to put the housing market back on track. The paper was widely circulated, and many of the recommendations have been implemented. Click here to download the paper.
- In August 2010, we proposed the rental REO solution in meetings with people at HUD, Fannie Mae, Freddie Mac, Treasury, and the Fed.
- Since then, we have answered questions about the program, read thoroughly on the topic, and identified property management and capital experts to develop a potential pilot rental REO program.
We did all of this pro bono to understand the potential of government to turn around the housing market. We continued to monitor the single-family rental industry as it has emerged as a new asset class and a fixture in our housing market dynamics.
Recommended Research Subscriptions for Single-Family Rental Operators and Investors
Every month, we analyze and forecast the housing market at the metro, regional, and national levels to provide you with the information you need for a competitive edge. All of our reports are delivered via email with a short summary, and posted on our website for access 24/7. Based on their needs, single-family rental operators may receive a unique combination of the reports below to get the answers they need and gain insight based on their business.
Burns Single-Family Rental Analysis and Forecast
Burns US Housing Analysis and Forecast
We designed this report for the executive who wants to make sense of all of the headline news. This monthly report examines more than 150 metrics related to housing. The Executive Summary gives an overview of the important metrics affecting the housing market and our view of their impact on the future.
Specialized Reports for Single-Family Rental Operators and Investors
The National Rental Home Council (NRHC) and John Burns Real Estate Consulting have partnered on the Single-Family Rental Survey, a first-of-its-kind resource that will serve as the definitive gauge of professionally managed single-family rental industry conditions.
Single-Family Rental Survey
The Single-Family Rental Survey is a first-of-its-kind resource, offering a snapshot of market sentiment for the fastest-growing segment of the housing industry. The Single-Family Rental Market Index (SFRMI), which is based on surveys of the owner-operators of more than 200k single-family rental homes, will be released quarterly, so it will always reflect the latest perspectives from within the industry on the state of the SFR market.
We offer customized consulting services for those looking to plan their business better and to support upcoming decisions with facts.
JBREC Single-Family Rental Insights
Back in October 2021, we published an article identifying $30 billion in capital chasing strong single-family rent growth. Only 3 short months later, that number has increased to over $50 billion.
We identified 43 announcements totaling more than $30 billion in capital that are targeting US rental housing.
We now have concrete data to back some of the multi-million dollar decisions that single-family rental developers make.
The single-family rental (SFR) sector continues to impress in 2021, with new lease effective single-family rents exceeding double digits in many of the largest single-family rental markets.
Investors continue to ink deals in the single-family rental (SFR) and build-for-rent (BFR) space, despite a global pandemic. With already strong fundamentals (magnified by COVID-19), SFR and BFR show no signs of slowing. Investors have thrown billions of dollars of capital into the sector in just the last year.
With occupancy rates at an all-time high and investors increasingly expanding their portfolio to include this asset class, we wanted to highlight the recent investor and capital transactions* in this sector.
We have all heard the tales of the current renter migration to the suburbs and even to the exurbs in some parts of the country. Until now, the migration story captivating the housing sector has been mostly anecdotal. But we now have proof! Our recent national survey of single-family rental (SFR) operators provides hard data confirming the migration movement that has been amplified by the pandemic. Permanent work from home permissions, the possibility of more online school in the future, and the need for larger and better configured indoor and outdoor spaces are acting as the accelerants.
In our quarterly SFR survey of 175,000 institutionally managed single-family homes across 55 markets, a partnership between John Burns Real Estate Consulting and The National Home Rental Council (NRHC), we learned:
59% of new SFR tenants are relocating from urban locations, with 41% of new tenants moving from already suburban locations.
Demand for single-family rental homes remains robust according to the Burns Single-Family Rent Index™. US single-family rents accelerated 3.8% YOY in September, roughly unchanged from August’s 3.9% YOY growth. The index tracks new leases across the 63 largest single-family rental markets in the US.
Despite ongoing economic uncertainty, US single-family rents continue rising, with September’s growth of 3.8% YOY exceeding the 3.4% YOY historical average dating back to 1985. As seen in the chart above, US single-family rent growth historically moderates during recessions but does not turn negative (even during the Great Financial Crisis).
“Today, single-family rents are not hitting the normal recession rough patch for several reasons,” said Rick Palacios Jr., the firm’s Director of Research.
The purpose of the Light is to highlight bright spots in the real estate market in the wake of a historic pandemic. Perhaps no other real estate asset class performed as well or garnered as much interest since COVID hit than the single-family rental (SFR) space. We define SFR as a single-family detached or attached home available for rent. Walls can be shared, but the homes cannot be stacked. The build-for-rent (BFR) space is a subset of SFR, and we define BFR as a dedicated neighborhood of homes constructed expressly for the purpose of renting. We at John Burns Real Estate Consulting are fully immersed in the SFR and BFR world and have analyzed market attractiveness for the product. We recommend product and rents for hundreds of open and planned BFR communities around the country.
The single-family rental (SFR) space has quickly quieted skeptics and scaled into an institutional asset class. Build-to-rent (B2R) is now playing an emerging role in the industry’s evolution. In less than a decade, Progress Residential, Tricon American Homes, Front Yard Residential, American Homes 4 Rent, and Invitation Homes have all solidified proof of concept for the SFR industry. Several of these industry leaders are now targeting B2R as part of their growth initiatives. However, a new group of operators is pursuing B2R as a standalone business model.
Why Dedicated Communities of Single-Family Rental Homes Should Be Part of a Multifamily Rental Portfolio
Companies spend huge dollars attracting and keeping clients—and this is certainly true for apartment owners. The operator who values customer retention should be asking, “Where is my tenant moving to and why?” Per Freddie Mac’s recent survey of renters, of those planning to rent their next home, 45% indicated they prefer to move into a single-family detached or attached rental home (“SFR”). Why? Only 11% of apartment units are 3+ bedroom homes. Over 65% of SFR homes have 3 or more bedrooms. And single-family homes offer other advantages. Our market surveys show that SFR tenants strongly desire the privacy offered by a single-family home with a yard, and they really don’t want to have someone live above or below them.
If there used to be a hot tub full of cash for build-for-rent (BFR) deals, now there is an Olympic-sized swimming pool. Demand for BFR development is at an all-time high. BFR developers can usually outbid their competitors for land. Mike Moser, CEO of Starwood Land Advisors, explains to us how his team strategically focuses their investment efforts in the BFR and equally competitive general residential development world.
Dallas Tanner, the Chief Executive Officer who co-founded Invitation Homes in 2012, shares with us the future of rental homes.
Dean talks with Rick Palacios Jr., our Director of Research, on the quickly evolving single-family rental (SFR) industry.