Institutional single-family rentals are the new apartment REITs

RealEstate

Single-family rentals (SFR) deliver better yields and tenant retention than apartments. Top 3 operators own 400K+ homes and are consolidating a $4T fragmented market. Millennials want yards but can't afford to buy.

Signal Strength

Moderate

Bull Case

+
SFR rent growth at 5-6% annually vs. 2-3% for apartments due to limited supply
Invitation Homes Q4 2024 Earnings
+
Average tenant stays 3+ years vs. 18 months in apartments - lower turnover costs
American Homes 4 Rent Investor Day 2024
+
Homeownership rate for under-35s at 40-year low - forced renters
US Census Bureau Housing Survey

Bear Case

-
Political backlash - bills to restrict institutional buying in 10+ states
National Conference of State Legislatures Tracker
-
Home prices at all-time highs make new acquisitions dilutive to returns
Case-Shiller Home Price Index
-
Rising insurance costs in Sun Belt markets eating into margins
Insurance Information Institute Report 2024

Related Companies

INVH

Invitation Homes

$22B

Largest SFR REIT with 85K homes, Sun Belt focused

AMH

American Homes 4 Rent

$15B

60K homes, build-to-rent development pipeline

RDFN

Redfin

$1.5B

iBuying pivot to rentals and property management tech

OPEN

Opendoor

$2B

Large SFR portfolio after iBuying wind-down

Key Catalysts

Feb 15, 2025

Invitation Homes Q4 earnings and 2025 acquisition guidance

Jun 1, 2025

Florida and Texas institutional buyer restriction bills - key vote dates

Aug 1, 2025

Progress Residential (Pretium) IPO expected - $15B valuation

Disclaimer: For informational purposes only. Not investment advice. ThesisSwipe provides research and analysis but does not recommend any specific investment decisions. Always conduct your own research and consult with a qualified financial advisor before investing.

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