The concept of pooled single-family rental housing has been slow to catch on in the months since the government launched its official program for distressed assets, yet real estate companies and financiers are increasingly finding ways to get involved with the housing. In September, George Smith Partners announced it had arranged financing for several pools purchased by an entity known as 29th Street Capital in the Sacramento area. The properties that are being acquired were foreclosed on and then purchased through trustee sale auctions.
So far, single-family rental properties are offering returns that are 200 to 500 basis points higher than those on traditional apartments, generating a more generous investment yield, according to Davies. And with demand for rentals growing as people favor them over owning their own properties in the continued volatile economy, demand seems likely to grow.