Single Family Real Estate Investment Firms

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Best Property Management Companies Of 2022

Wall Street investment firm looks to buy single-family homes as economy slows

Greystar, our overall best choice for a property management company, serves property owners across the globe with their Beyond Expectations motto has a wide range of services available for owners and has a disciplined, process-driven approach to increase efficiencies, reduce investor risk, and drive performance and profitability.

  • Staff is trained to think like an owner

  • Ranks first among the Top 50 U.S. Apartment Managers according to the 2020 National Multifamily Housing Council

  • Apartment leasing website for prospective residents keeps occupancy high

  • Online portal for investor-owners

  • No properties yet in Alaska, Maine, New Hampshire, Rhode Island, or South Dakota

Greystars leadership has created a company culture built on exceeding expectations with an owners mindset, making the company our top choice for property management firms.

Founded in 1993 and headquartered in Charleston, South Carolina, Greystar has grown into 192 markets globally, with $29.3 billion in assets under management.

The company offers end-to-end property management services, such as:

  • Property operations
  • IT

Greystar specializes in managing active adult communities, multifamily properties, collegiate housing, and flexible corporate housing.

Reports include accounting and financial management, marketing and reputation management, and legal and regulatory compliance.

How Can Investors Gain Exposure To Us Single Family Homes In Their Portfolios

The most direct way to gain exposure is through direct ownership of single family properties that can be rented to tenants. Investors can purchase homes directly or can engage a local real estate agent to assist them. If an investor prefers to invest in a more passive manner, they can invest in a real estate fund that purchases and leases out the homes or can partner with a local operator that will purchase homes and manage them on behalf of an investor in exchange for some agreed upon profit split and other fees. In addition, investors can invest in loans secured by homes to earn high yield fixed income-type returns. For more information on this strategy please reference our Trust Deed Investing FAQ

Key Takeaways: The Burbs Are Back

Single-Family Rental fundamentals are stronger than ever as the ‘Burbs are back – and better than ever. SFR REITs reported near-perfect rent collection, record-high occupancy rates, and rent growth eclipsing 5% in their recent earnings reports. While we continue to see very favorable supply/demand dynamics in the single-family rental REIT sector over the next decade, the wild card will be whether or not these REITs can crack the code to unlock sustainable and accretive external growth which has been harder to come by over the last half-decade. We continued to see real estate technology as the wild-card that could allow the SFR REITs to drive property-level efficiencies and help to fuel external growth via acquisitions.

Unlike other REIT sectors, we believe that rising interest and mortgage rates could be a benefit to these SFR REITs both on the demand-side and on the acquisition-side . Even before COVID ignited the suburban revival, the 2020s were already poised to be a strong decade for the U.S. housing industry, fueled by record-low housing supply and robust demographic-driven demand, but SFR REITs still must continue to execute and innovate to capture their share of the economic value from these secular tailwinds.

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Why Cypress Bay: Location

Fundrise said it targeted Cypress Bay for this investment partly because of its “great location” on Florida’s Space Coast, not far from Kennedy Space Center and Orlando Brevard County’s population growth and Palm Bay’s recognition “as a hub for excellent job, wage and high-tech growth.”

It said Cypress Bay is a “high-quality asset” and is “social distancing-friendly,” because of “the privacy provided by the community’s fully detached and individual homes will be particularly attractive attribute to renters.”

This $45.7 million acquisition was made through a joint venture between two Fundrise-sponsored funds totaling $21.6 million, combined with a $24.1 million loan.

Fundrise’s single-family rental home portfolio consists of 61 communities in 23 metropolitan areas and 10 states, particularly focuses in the Sun Belt.

The company also invests in apartment communities, commercial properties and mixed-use developments.

Among the 254 real estate assets Fundrise lists on its website is a $6.03 million investment in the construction of the Mason Palm Bay, a 252-unit apartment community near Emerson Drive and Malabar Road in southeast Palm Bay.

Fundrise said it is in partnership with Waypoint Residential on the Mason Palm Bay project. Waypoint has invested more than $2 billion across more than 20,000 rental housing units in the South, Southeast and Midwest markets. Fundrise said it previously has invested in eight other similar projects with Waypoint Residential.

What Else Should I Know

Family Investment Companies And How They Work  Real Estate Funding ...

Real estate investing is its own animal, regardless of whether youre doing it through a crowdfunding platform or in a more traditional manner. Regardless of the venue, you have to be prepared to put cash upfront and be comfortable with the fact that this is not a liquid investment.

Youll be making a commitment and you wont immediately be able to pull out your investment monies, so be prepared to stay with a property for at least 3 years. With real estate as with many things, longevity is its own reward.

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How Big Is The Residential Real Estate Market How Should I Consider The Market When I Look At The Opportunity

According to a late 2011 study from Morgan Stanley, there are approximately 20 million housing units in the single family rental market . This number represents just over 50% of all rental units in the U.S. at an average value per unit of $150,000 this represents a total market value of approximately $3 trillion. Another important consideration when looking at the single family rental market is the expected increase in the number of properties that will be converted from primary residences to rental units. Some forecasts project that between five to seven million additional properties will be liquidated and converted to rental properties to meet the demand from former homeowners that need housing units.

Whats The Deal With Investment Companies Buying Houses

Theres been a lot in the news lately about investment companiesnamely big ones like BlackRock, going into communities and buying up all the properties. The home market has been explosive over the past year, with mortgage rates at historic lows and the pandemic leading many people to want to change their living environment all at once.

For middle and upper-income people, their incomes werent significantly affected by the pandemic, and the real change for them was that they gained more mobility and could perhaps leave big cities and continue working remotely for their employer.

That did drive prices up quite a bit and lead to bidding wars around the country.

Theres another factor at play too.

Wall Street is buying family homes, like BlackRock, but other companies are as well.

Pension funds, Wall Street banks, and investment firms are buying family properties not only in the U.S. but also Europe.

The reason?

There are many, but part of it has to do with the fact that they want alternative real estate investments to their retail and commercial properties, which may take a long time to recover from the pandemic, if ever at all.

With remote work looking like its here to stay, however, the pandemic and the ripple effects could keep the demand for suburban family homes high.

Home purchases from investors went up 2.7% year-over-year in the first quarter of 2021.

Investors bought around one in every seven homes in the first quarter of this year.

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Best For Vacation Rental Management: Vacasa

Vacasa

Providing vacation rental management in 34 states , Vacasa is the premier North and Central American vacation rental management company. Their geographic coverage and specialized expertise in their field make them the hands-down winner in this niche.

  • Industry-specific management for vacation rentals

  • 299,000-plus five-star reviews

  • Provides 3D tours of their properties to help fill vacancies

  • No scope outside of this industry

  • Does not service many central states

While managing a rental property is tough, managing a vacation rental property may be even tougher because of the frequent turnover of tenants, so we believe you need a player focused on the details to make this sector a success. Vacasa understands the nuances of vacation property management better than anyone.

Started in 2009, founder and vacation property owner Eric Breon struggled to find a property manager that could offer both a professional rental experience for his vacationers and a strong financial performance for his property. Today Vacasa has 25,000 vacation homes under management serving two million guests each year.

Vacasa offers a full package for your needs in the residential vacation home industry, including cleaning, financial records, four-hour local guest support, 3D online home tours, professional writing and photography, streamlined reservation management, and thorough housekeeping after every stay.

Best Onboarding System: Apartment Management Consultants

Are Single Family Homes a Good Investment?

Apartment Management Consultants

We named Apartment Management Consultants as the property management company with the best onboarding system as a result of their intense focus on documenting their management plans, and exceptional property manager training programs.

  • Handles all the property’s banking for you

  • Preferred vendor program provides better quality and cost savings

  • Allows clients to give feedback on regional employees and have a say on who manages properties on a local level

  • This company operates mostly in the West and Midwest, so it may be difficult to arrange management on the East Coast

  • It is geared to manage larger properties

Onboarding becomes easy when systems are documented for new property managers to follow and continuous learning is a part of your job. No property management company does this better than AMC.

AMC manages 104,067 units in 592 properties across 20 states. Clients include private equity firms, institutional investment firms, and single asset owners. It ranked eighth on the National Multifamily Housing Councils list of largest apartment managers in the United States in 2020.

The company serves residential multifamily owners through the following services:

  • Capital budgeting
  • Training programs
  • Accounting and banking

Onboarding includes a financial statement review, market reviews, capital improvements, physical condition reports, and an overall monthly summary of operations.

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Why You May Want To Add Single

Single-family rentals may offer benefits to practically any investment portfolio. Adding this investment to your portfolio can provide diversification from stocks. Real estate is a tangible asset that you can rent out or sell.

These rentals may provide you with a monthly income stream from rent collections. The home itself can also appreciate in value over time, which means that any eventual sale of the home could net you a sizable profit. Even though the greater economy has been impacted by inflation as of late, single-family rentals are largely considered to be resistant to inflationary conditions.

What About Investing In An Area That Has A Crime Problem

The highest-yielding investment homes are typically those in high crime areas. The yield is high because most real estate investors prefer not to invest in areas where they feel unsafe. Investors who are set up to manage properties in high crime areas might earn good returns, but home appreciation in these areas may be more modest than in safer and more desirable neighborhoods.

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What Kind Of Yields Can Single Family Home Investors Expect

First, lets define how yields are calculated for single family investors. Suppose you purchase a home for $85,000 and spend $15,000 on renovations such as paint, flooring and updating the kitchen. Your total cost basis for this property is $100,000. A rule of thumb is that you should be able to rent out the property for a monthly rent of at least 1% of your cost Äîin this case, $1,000 per month. If you achieve this rental income, your annual rent would be $12,000 . Your actual rent collected may be a little less once you account for vacancy, occasional bad debt and the like. Lets assume actual rent is $11,000 per year. Your operating expenses including property taxes, insurance, repair expenses and property management fees might be $5,000 per year. This would leave you with $11,000-$5,000=$6,000 per year in cash flow , which represents a 6% yield on your cost basis of $100,000. In many markets today, for investors who purchase carefully and renovate cost effectively, these types of yields or capitalization rates are achievable and in some cases can be exceeded. This represents an unleveraged yield in which all of the investment is made in cash. Below we describe how yields change with the use of leverage.

Best For Commercial Properties: Colliers International

The Great Real Estate Investment Debate: Multifamily Properties Vs ...

Colliers International

With two billion square feet under management and one of the broadest service offerings, Colliers International is a world-class commercial property management company.

  • Financial reporting and analysis to ensure your asset is profitable

  • Strong focus on adding value to your property with capital projects

  • In-house engineering team that measures and optimizes your buildings key performance indicators

  • Less emphasis and leadership on sustainability than some competitors

  • Broad scope of building types may be a challenge for deep expertise in any niche

  • Publicly traded, so questionable whether the first priority is to building owners or stockholders

Commercial property investors who want to minimize their risk should look to Colliers as a safe bet. The company manages commercial properties in 67 countries, has annual revenue of $3 billion from its $40 billion in assets under management, and more than 18,000 professionals on staff. This experience and proven profitability results make it our recommended choice as the best commercial property management company.

Established in Australia but expanded into the U.S. in 1978, Colliers has become a household name. Of the 67 countries where it operates, the U.S. is the biggest contributor to the business.

The company has expertise in capital markets, landlord representation, project management, real estate management services, valuation and advisory, securities, mortgage, insurance, engineering, and design.

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What Does Gatsby Investment Do For Investors

Our team is made of specialized experts who handle every detail of your real estate investment, including:

  • Handling all financials, accounting, and Schedule K-1 filing
  • Making prompt proceed payments to investors

Gatsby takes care of the real estate investment process from start to finish, allowing you to maximize your return on investment from the comfort of your home.

A $60 Billion Housing Grab By Wall Street

Hundreds of thousands of single-family homes are now in the hands of giant companies squeezing renters for revenue and putting the American dream even further out of reach.

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Chad Ellingwood wasnt really in the market for a home in the summer of 2006. But when his best friend came across an intriguing listing in Woodland Hills a bedroom community in Los Angeles Countys San Fernando Valley the two men decided to visit on a whim.

The house was not in amazing shape, Ellingwood said. It needed some help. But I loved it. I wanted it immediately.

One of Ellingwoods goals had always been to buy a house by the time he turned 30 a birthday that unceremoniously came and went six months earlier. When Ellingwood began speaking to lenders, he realized he could easily get a loan, even two this was the height of the bubble, when mortgage brokers were keen to generate mortgages, even risky ones, because the debt was being bundled together, securitized and spun into a dizzying array of bonds for a hefty profit. The house was $840,000. He put down $15,000 and sank the rest of his savings into a $250,000 bedroom addition and kitchen remodel, reasoning that this would increase the homes value.

As Tuomi put it in 2016, Ancillary revenue is the first kind of low-hanging fruit.

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Not Competition But Instead Meeting A Need

SFR companies dispute the storyline that casts them as the villain.

Theres absolutely no data and no evidence to support the contention that single-family rental home companies do anything but provide a positive housing option for consumers, National Rental Home Council Executive Director David Howard said.

In todays market, with its challenges with affordability and accessibility, single-family rentals have become even more important.

Howard said SFR companies are interested in growing cities like Charlotte because theres a demand for families who want to be near employment centers and quality schools.

Frankly, it makes a lot of sense for companies to be involved with a market like Charlotte, he said.

Demand for single-family rental housing is strong in a market like Charlotte. If the demand was not there, you would not see the kind of activity in the rental market that youre seeing.

Howard said theres also a need for people who arent able or ready to buy yet.

Mireya Gaton is one of those people. She moved to the area from California but feared rushing into homeownership. Instead, she signed a lease with Tricon Residential, one of the regions largest SFR buyers, to rent a home in Gastonia.

I wanted to explore the area before I committed to buying a house, Gaton said. Renting first was just the best way to avoid making the wrong decision.

Swiss Investment Firm Acquires 3500+ Us Single

Investment firms are buying a substantial amount of U.S. starter homes

The Swiss-based private equity firm Partners Group announced yesterday that it has acquired a $1 billion portfolio of single-family rental homes located across 17 states in the Sunbelt region.

The portfolio comprises 2,528 recently constructed single-family rentals and over 1,000 homes currently under construction. The majority of the properties are located in Texas, Alabama, Georgia and Oklahoma.

The announcement was made shortly after The White Houseannounced President Bidens plan to ease the burden of housing costs, which includes addressing the growing share of single-family home purchases by investors.

According to data from CoreLogic, investor purchases accounted for more than 22% of all single-family home purchases made nationally during the first three quarters of 2021. Almost a quarter of the investor purchases were made by large investors with 100 or more properties.

Real estate investment companies have been focusing heavily on Sunbelt states as job growth has been accelerating migration trends and boosting the demand for single-family homes in these areas.

Approximately 82% of Invitation Homes portfolio of over 82,000 single-family homes is located in the Sunbelt region. Fundrise has acquired over 260 rental homes in these markets over the past seven months through its Goldman Sachs backed Interval Fund and Growth eREIT.

Photo by tokar on Shutterstock

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