As COVID-19 continues to impact a wide span of industries, SVN | SFRhub Advisors continues to monitor and interpret the current status and possible future outcome of the real estate segment. Today, the sectors most affected by the pandemic include professional business services, health care and hospitality, in addition to many commercial real estate asset classes. Single-family residential (SFR) rental homes, however, have remained stable and are perceived by both domestic and international investors to be a safe-haven investment alternative.
Due to historic stability and performance during downturns in the market, SFR assets tend to hold their rents and have even experienced increased rates during trying times. According to a recent John Burns Real Estate Consulting presentation, the SFR rental market is expected to be on a similar trajectory.
Here are some highlights:
- The effect the COVID-19 virus will potentially have on the housing market is to further delay household formation and home-buying, as renting is seen as more affordable without a down payment needed.
- Surveyed Buld-for-Rent (BFR) projects had a very strong 97% occupancy rate prior to the COVID-19 pandemic. This is expected to stay unaffected, as feedback from property managers and builders in this asset class have experienced no slow down in leasing due to the recent epidemic and the shutdowns it has caused.
- SFR rentals are expected to be the first sector to recover, as well as the best long-term play over any other residential class due to capital seeking safety and stable yields, as well as the current low supply of newly built rental homes.
With many experiencing a lingering sense of uncertainty, we want to remain a constant resource for you. While a full economic recovery is expected to take time, SVN | SFRhub Advisors will continue to be accessible, providing updates, knowledge and expertise as your strategies and methods may shift during this time.