There was article in the WSJ on May 16 titled “Single-Family Rentals Keep Pulling in Investors”. It ties in nicely with one of my earlier post concerning single family housing as the new asset class. This article discussed Colony American Homes, a private equity firm, which has raised about $750 million so far and will have purchased more than 1,000 distressed homes by the end of June.
Their projections are based on annual rental cap rates in the 7 – 9 % range and they assume the rents and home values will increase 3-5% per year going forward. This will equate to 15% returns to their investors.
Those seem like conservative projections to me based on what I see in my market and it does give some validation to the theory single family housing is becoming a viable asset class for investors.
I’m still not sure how efficient asset management will be on such a large scale, but feel that smaller investor groups targeting 75 – 100 homes in specific market areas will do well. Real Property Management Executives Greater Atlanta would like to partner with interested investor groups to pursue these opportunities. Give us a call!
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.