Single-family rental numbers are increasing, outpacing the market and surpassing investors’ expectations. Even though single-family rental real estate investment trusts (REIT) are one of the youngest REIT sectors, this particular investment option has seen an incredible increase since the housing market crashed. Continue reading the linked report to learn just how exactly this market shift occurred.
In our REIT Rankings series, we introduce and update readers on one of the fifteen real estate sectors. We rank REITs within the sectors based on both common and unique valuation metrics, presenting investors with numerous options that fit their own investing style and risk/return objectives. We update these rankings every quarter with new developments for existing readers.
Single Family Rental REITs comprise 2% of the REIT ETFs (VNQ and IYR). Within the Hoya Capital Single Family Rental Index, we track the four SFR REITs which account for roughly $20 billion in market value: American Homes 4 Rent (AMH), Invitation Homes (INVH), and small-cap REITs Front Yard Residential (RESI) and Reven (RVEN). Not included in our index is Canadian firm Tricon Capital (OTC:TCNGF), which also owns a large portfolio of US SFRs within a diversified residential portfolio, including apartments and homebuilders.
Above we show the size, geographical focus, and quality focus of the four single-family rental REITs we track. These four SFR REITs own roughly 150k single-family homes and currently focus on markets that have experienced the strongest economic growth during this recovery. Many of these markets were hit particularly hard by the housing bubble, which allowed institutional investors to buy distressed properties in bulk. SFR REITs own a mix of affordable and middle-tier homes. Relative to apartment REITs, SFRs benefit from lower resident turnover rates but need to expend more per turn.
Contact Jeff Cline at SVN | SFRhub Advisors
SVN | SFRhub Advisors, LLC
2400 E. Arizona Biltmore Circle
Phoenix, AZ 85016