As we enter into the first week of May, states across the country are cautiously preparing to shift into the first phase of reopening the economy. While the timeline and outcome of the gradual reopening phases remains uncertain during the COVID-19 pandemic, we are all hopeful for a strong and healthy recovery across industries, communities and markets.
As previously reported, the single-family residential rental market continues to remain stable with growing demand. In a GlobeSt.com article last week featuring SVN | SFRhub Advisors, Jeff Cline stated, “As we’ve seen for decades, SFR investment typically grows during economic downturns. We expect this downturn to be no different.”
Within the single-family rental market, Build-for-Rent assets are favorable among investors, providing higher margins than other single-family assets and sell-out for a subdivision is 75% faster. According to Jeff Cline, these BFR communities have attractive permanent financing available, longer and higher tenant occupancy, less turnover cost, and little to no capital expenditures for five to 10 years.
As the SFR rental segment continues to remain anchored, many have started to pivot their interest to newly developed Build-for-Rent (BFR) communities. This week, we would like to share insight as to what the SVN | SFRhub Advisors team has seen surrounding the industry and this growing segment, according to a recent John Burns Real Estate Consulting presentation.
- According to insight from over 2,000 housing industry professionals, 34% reported increased demand for single-family rental goods and services as compared to the prior week, while 56% reported stable.
- Reported to be the worst time for residential homebuyers to buy a house (42-year history of survey), indicating that many may continue to rent or opt to rent, versus homeownership.
- Current increased interest in newly built rental homes indicated as Google searches in all major markets increase MOM nationally for ‘rental homes’ at 34% and ‘new homes’ at 35%.
- Landlord distress is subsiding as more delinquent renters make their payments, receive government checks, and get put back on payroll. Currently, 70% of US households (89 million) are receiving a check or deposit averaging $1,800 as the PPP deposits cover salaries for two months for 25% of Americans, with another 25% soon to be covered.
SVN | SFRhub Advisors remains, as always, a trusted resource for you through these uncertain times and will continue to be accessible, providing updates, knowledge, and expertise.
We wish you, your co-workers and family good health.
The SVN | SFRhub Advisors Team, Phoenix, Arizona