Pandemic has Positive Impacts to Single Family Rental Strategy
The COVID-19 pandemic has had lasting impacts on businesses and real estate strategies across the globe. The Single Family Rental (SFR) asset class is one strategy that has proven to not only be minimally impacted, but in fact, has provided reasons for renters to move from apartments to a SFR environment.
The reasons are vast:
- Social-distancing in a single-family home environment is much easier than it is in a mid-rise or high-rise apartment where the density is greater and there are more shared amenities and common spaces like elevators.
- People are now requiring more space – specifically as the demand for home offices increases as more and more people are required to Work From Home.
- There has been a shift from urban environments to suburban environments due to the density issues. Most SFR homes are located in more traditional suburban areas allowing residents to have more outdoor space and fresh air.
In Q4 2020, John Burns surveyed the owners of 175,000 institutionally managed single-family homes across 55 markets and learned that the flight from urban apartments since the Pandemic started is occurring now. His findings show:
- 59% of new SFR tenants are relocating from urban locations
- 32% of new SFR tenants are moving from apartments
The pandemic has only helped drive interest in the SFR strategy.
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