Whenever you fill out an application to rent a Single Family Home, have you ever wondered how many properties the landlord actually owns?
Most people actually don’t care about that piece of information. However, if you are a real estate investor or plan to buy a home some time in the future, I highly advise you should and here’s why.
Invitation Homes, which is considered American biggest landlord, was found barely 10 years ago and is currently the owner of more than 80,000 homes in over 16 markets. This equates to more than $18.5 billions worth of Real Estate asset. As of mid-October 2022, when both stock and real estate market is on its way to hit rock bottom, the firm has been meeting with many investors with the goal of raising $1 billion in funding to expand its SFR portfolio according to Bloomberg’s report.
Just like any other institutional investors, the firm’s CEO, Dallas Tanner, made a decision to slow down the expansion earlier this year under rapid and brutal market’s shift. Instead, they have quietly prepared a slow but steady attack plan to go full force whenever the moment is right. As a matter of fact, this is certainly not Tanner’s first rodeo as he took advantages of the 2008 and 2009 housing market crash and led the firm’s strategic initiatives to grow its portfolio to where it is today.
As of now, besides vintage homes, the firm is planning strategic partnerships and looking to purchase newly-built properties in bulk from many builders across the nations as homebuilders are struggling to dispose their inventories.
Why We Should Care What Invitation Homes is doing
Here’s my 2 cents on why we all should pay close attention to what Invitation Homes is doing and I’ll keep it very simple: Future Shortage of Supplies. Within only 10 years, the firm successfully acquired more than 80,000 homes and more to come despite the poor condition of the market. At this point, it’s just the matter of fast they expand their portfolio.
Just like Invitation Homes, there are hundreds of similar Single-Family Rental firm out there along with thousands of boutique mom-and-pop investors, who are looking to purchase as many properties as possible during the economic downturn. Are they planning to sell those properties later on? Nobody can predict that. But until then, if they decide to hold and keep renting their properties, we will eventually face a light then major housing shortage in terms of acquisition.
As a young homebuyer and an investor myself, I anticipate firms like Invitation Homes will take over most of the markets in the United States and slowly control the supplies & their respective price points as the purchase demand remains high while the housing supply stays low. And to the future generation, the American Dream may be much harder to achieve.
Don’t think so? We can agree to disagree or we can chat. My email is chad@chadvorealestate.com
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