This article covers the current state of the single-family rental (SFR) market from the perspective of institutional investors. The author posits that SFR activity has been relatively muted in spite of increasing demand from renters and improved conditions for landlords thanks to various stimulus efforts.
The author notes that large SFR investors have found themselves unable to capitalize on the current market situation, largely due to the fixed nature of their investments. These investors have mostly locked in deals with long-term price contracts and are therefore unable to take advantage of the rise of rents. Many investors that opted to pay cash for their properties are similarly stuck in fixed arrangements as they cannot adjust their rental rates as quickly as the market demands.
Moreover, the article discusses the impact of COVID-19 on the SFR market. Despite high demand from tenants, the nationwide eviction moratorium has created a difficult environment for SFR landlords. The article states that landlords are not willing to invest in housing without the ability to take action against delinquent tenants. This has put further strain on the SFR investor market, as investors are unlikely to buy or rent homes in volatile markets.
This article paints a picture of an SFR market that is in a state of flux. Despite strong positivity from renters and favorable market conditions, the large institutional players have been unable to capitalize on these developments. Many investors are stuck in long-term pricing contracts and cash deals while others are hesitant to invest in a volatile climate. It remains to be seen just how the SFR market will eventually settle, but as of now it appears to be stuck in the doldrums.
You can read this full article at: https://www.housingwire.com/articles/institutional-sfr-players-are-stuck-in-the-doldrums/(subscription required)
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