Single-family investing is a profitable niche. Big companies continue to expand their inventory, but it’s unclear how much they can grow before there’s a public backlash.
NEW YORK – Wall Street firms are more eager than ever to buy family homes, evidenced by Blackstone’s real estate investment trust (REIT) recent purchase of a portfolio of apartments for $5.1 billion from insurer American International Group. In June, the investment firm also spent $6 billion on Home Partners of America, a company that owns more than 17,000 houses across the United States and offers renters an option to buy.
In addition, private-equity giant KKR launched a new division that will buy homes to rent them out.
Large Single-Family Investors Are More Prolific
Large investors’ single-family home activity is expected to increase now that the COVID-19 pandemic has made owning family homes more attractive. While the rents collected from commercial real-estate assets such as malls and offices took a hit during the COVID-19 crisis, most private residential tenants continued to pay up.
Family homes could be an even better long-term bet than owning e-commerce warehouses. Real-estate research firm Green Street estimates that renting out U.S. single-family homes will deliver annual returns of 6.6%, compared with a forecast of 6.3% for industrial property.
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*Source: Wall Street Journal (07/23/21) Ryan, Carol
If you are in the market for buying or selling a home, the Cachon Team is your best choice in Naples, Florida to help you. Call us at 239-399-5432 or fill out the form below.
