Single-Family Homes in Phoenix & Sunbelt Attracting Big Investors

[Melanie Johnston]

If you're an individual investor who owns or will be buying a single family home to rent in Metro Phoenix (and other booming Sunbelt states), good news: the big dogs with their legions of analysts think you're making a smart move...because they're doing it too.

From a 10/19/20 article by Mark Heschmeyer of CoStar News:

"Young adults have been fueling demand in the urban apartment market for several years. But they are getting older, and the coronavirus outbreak in the United States is said to be a catalyst prompting them to finally make the move to a larger home.

“There has been several billion dollars invested in the [single-family rental] and build-for-rent segments since COVID-19,” Jeff Cline, executive director and principal of SVN SFRHub Advisors in Phoenix, said in an email to CoStar News. “We see investors moving to this very stable investment class from all other [commercial real estate] segments because of higher returns and more stability.”

Single-family rentals are in demand from multifamily tenants as renters choose buildings with limited common areas, and without shared hallways and elevators, Cline said. Also, tenants haven’t been able to use some amenities, such as gyms, that have been closed or restricted during the pandemic.

Last month, Cline’s company launched a $1 billion fund set to acquire and invest in about 4,000 to 5,000 new construction rental homes in addition to existing single-family residential portfolios across the United States.

In recent weeks, other investors have been flocking to the property type.

Haven Realty Capital, one of the first investors to target for-rent single-family homes after the Great Recession, is teaming with Chicago private equity firm Walton Street Capital on a $133.7 million deal for 537 properties in greater Atlanta.

Single-family rental giant Invitation Homes and Rockpoint Group this month said they plan to buy up to $1 billion of rental homes. They’ll be targeting mostly Sun Belt markets where Invitation is active already.

I know 4 BiggerPockets OOS investors who recently bought SF rentals in Goodyear, Scottsdale and Mesa (with my help). While our market is highly competitive, it's still possible to find a worthy investment.

These investors were the yachts who acted quickly while the major players (supertankers) were still fueling up. Advantage...individual investor!

Melanie