If you’re in the market for a new home, you’ve probably heard about the increasing number of rental homes being purchased by investors. You may even be wondering if it’s possible for the average person to find a home amongst all of these institutional buyers. The truth is, institutional investors do own a significant portion of rental homes, but they are not the only game in town. In fact, there are four distinct categories of investors, each with their own level of ownership in the housing market.
Let’s take a closer look at each category of investor and their level of ownership:
- Mom & Pop Investors: These are individual investors who own anywhere between 1-9 single-family rental (SFR) homes. While they may not have the buying power of larger investors, they still make up a significant portion of the rental market. According to a report by ATTOM Data Solutions, mom and pop investors own over 43% of rental homes in the US.
- Regional Investors: The next category of investors are regional investors who own between 10-99 SFR homes. While they typically focus on a specific region or state, they still have a sizeable impact on the rental market. Regional investors own 31% of rental homes.
- Smaller National Investors: The third category of investors includes smaller national investors who own between 100-999 SFR homes. These investors have a more national footprint and can be found operating in multiple states. They own 15% of rental homes.
- Institutional Investors: Finally, we have institutional investors who own over 1,000 SFR homes. These are typically larger firms, such as Blackstone or Invitation Homes, that have a significant presence in the housing market. While they may give the impression of owning all of the rental homes, they only own 11% of the rental market.
It’s also worth noting that not all institutional investors are created equal. While some may own a sizable amount of rental homes, others may focus more on commercial real estate or other forms of investment. Additionally, not all rental homes are owned by investors. Some are owned by people who purchased a property with the intention of renting it out, but never intended to become a professional landlord.
So, who really owns the rental homes in the US? It’s a combination of investors of various sizes, as well as individual property owners. While institutional investors do have a presence, they are not the only ones in the game. As you’re searching for your next home, it’s important to keep in mind that there are plenty of opportunities available, regardless of who owns the property. Understanding the different types of investors and their level of ownership can help you make a more informed decision and find the right home for you.
