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Large‐Scale Buy‐to‐Rent Investors in the Single‐Family Housing Market: The Emergence of a New Asset Class
Author(s) -
Mills James,
Molloy Raven,
Zarutskie Rebecca
Publication year - 2017
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.12189
Subject(s) - renting , purchasing , asset (computer security) , economics , capital (architecture) , order (exchange) , finance , scale (ratio) , business , financial economics , monetary economics , marketing , physics , computer security , archaeology , quantum mechanics , political science , computer science , law , history
In 2012, several large firms began purchasing single‐family homes, creating large portfolios of rental property, and securitizing these investments in capital markets. We present the first systematic evidence on this new investor activity in order to shed light on the factors that have supported its emergence. Three key factors were the ample supply of property for sale, tight mortgage financing and a decrease in acquisition and managerial costs brought about by technological advances. In addition, we show that buy‐to‐rent investors appear to have supported house prices in the neighborhoods where they concentrated.