2017 IMN Single Family Rental Investment Forum Overview
The Investability team returned this week from the 5th Annual IMN Single Family Rental Investment Forum (East) where we proudly served as the event’s Lead Sponsor. The conference, held biannually in Miami and Scottsdale, brings together the top service providers and investors in the single-family residential (SFR) investment space for networking and incredible education opportunities. We had a great time connecting with old friends and new players in the industry, but if you missed it, not to worry! Here are many of the conference highlights and information related to where the industry may be headed next:
Investability Real Estate, Inc. Chief Revenue Officer and host of The Real Investor Podcast (@RealInvestorPod), Dennis Cisterna, moderated the opening panel covering the overall state of the market. On the panel were industry leaders and execs like Rick Sharga, Chief Marketing Officer of Ten-X, ready to weigh in on the latest in SFR.
Dropping unemployment rates, low building permit requests and an overall lack of inventory have continued to drive rental demand across the U.S. As the credit markets remain tight and student loan debt continues to skyrocket, more people are being nudged toward rentership. Ultimately, indicators point toward a continued decline in homeownership rates in the U.S. while the eastern half of the country remains a hotspot for investors seeking strong yields.
Download the opening presentation here.
Later in the day, our Director of Enterprise Sales, Brittney Fairweather sat alongside Josh Swift, SVP of Investments at Colony Starwood Homes and other powerhouse investment leaders to discuss changes in both acquisitions and disposition strategies as the industry continues to grow and evolve.
Over the last year, seller expectations have risen and C-class transactions among high net worth individuals have increased. As noted by Josh when asked about Colony’s key investment markets, the Sun Belt has emerged as a strong rental geography along with subscale markets like Charlotte, Raleigh, Nashville, Phoenix, Las Vegas, Dallas and Atlanta. Capital is still being pumped into the industry as the public continues to recognize it as a viable long-term asset class, creating more competition and further suppressing inventory. Many leaders in the space have turned to creative acquisition and disposition strategies, including more boots-on-the-ground efforts, as direct campaigning continues to outperform many digital methods.
The second day of the conference kicked off with Investability’s Director of Sales and Business Development, Tim Connors moderating a panel focused on the benefits and differences between owning and operating small multifamily investments and single-family rental assets.
When it comes to investing in multifamily residences, investors can generally expect to see higher turnover rates, but also higher cap rates and returns. Multifamily investments can also offer more stability, because unlike single-family units, one vacant unit doesn’t stop all cash flow.
Senior Manager of Data Science, Doug Bendt, was another of Investability’s experts to be featured on a panel. This data-focused discussion covered valuation of Class A vs B vs C assets as well as yield opportunity in secondary and tertiary markets. Doug and his peers offered insight into the current economics of the industry as well as notable submarkets to watch.
Investors are frequently finding higher yields in smaller, older, lower value properties. Contrary to what may seem intuitive, higher value properties with lower yields have not seen higher home price appreciation rates. Rather, the lower rate, higher yield markets have experienced the greatest home price appreciation and yield compressions over the last four years. This is primarily due to the fact that many of these markets were affected by high rates of subprime lending and therefore, saw sharp rebounds in price post-recession. These trends are also driven by first-time homebuyers competing with investors for lower priced starter-home inventory. Markets like Detroit, Cleveland and Milwaukee have shown surprising yields, surpassing initial estimated rates.
Download Doug’s presentation here.
The IMN Single Family Rental Investment Conference is a great opportunity for investors to learn more about investing, get a pulse on the market and network with peers and service providers to help to propel their growth. Through panel discussions led by thought leaders and industry experts, it’s clear the SFR asset class is here to stay. We hope that even if you missed the conference, this recap helped shed light on advances being made in the industry and what’s next for the sector.
How Can Investability Help Investors Like You?
Investability is transforming the way investors search for, analyze and acquire investment property. By leveraging powerful market- and property-level data, investors can be empowered to make smarter decisions and grow their investment portfolios in a way that aligns with their unique strategy. Geography is no longer a factor limiting investment potential, as investors now have access to tools and resources to help invest beyond their backyards and into top-performing rental markets across the country. With a team of local brokers, a robust national database and a one-stop-shop network of service providers, Investability can empower investors like you to capitalize on the growing SFR market space and invest in real estate without limits.