Large-Scale Buy-to-Rent Investors in the Single-Family Housing Market: The Emergence of a New Asset Class

Abstract

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.