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55 business-purpose loans for the single-family rental with a sub-6% interest rate. Tessar expects interest rates to be up next year, so single-family rental investors will likely receive their best returns on investment before that happens. If rates were to go up 2%, it would create a "market event," Riehl said, but market experts don't expect that type of a jolt. Instead, most seem to expect moderate rate increases. When that happens, Riehl says that rent prices will increase to follow suit. e Federal Reserve is focused on keeping rates low for at least the next several months, which will accelerate market demand, said Jay Tenenbaum, Co-Founder and President of Capital Development at Scottsdale Real Estate Investments. "e only thing that changes this is if interest rates decided to go up, because the Fed says [interest rate easing] is over," Tenenbaum said. In and of themselves, rising interest rates won't signal a softness in the single-family rental market. However, if rates rise and there's a large jump in defaults and foreclosures, the single-family home rental market will suffer. e low interest rates represent only one factor contributing to the continued strength of the SFR market. People and their jobs are more mobile than ever before, so a growing number of consumers don't want to be tied down to a multiyear mortgage and the hassle of selling a property if they choose to move. Consumers are looking for more space for not only their families, but for home offices, remote schooling, etc. Multifamily properties can't always meet these needs. So, returns for the single-family home rental market remain strong. Pintar and Tennyson also observed that homeownership isn't the sign of success and stability that it once was. Many younger people are preferring to rent rather than tying up their money in a down payment in order to own a home. Kori Covrigaru, CEO, PlanOmatic, observed that "Most tech-savvy millennials and Gen Z audiences start their property searches online, and this has changed the way in which single-family rental properties are marketed today." Covrigaru noted that digital tools such as 3D virtual tours and interactive floorplans hold strong appeal for younger buyers and renters, since they allow a consumer to visualize a home without having to step foot inside of it. "In many cases, the use of digital tools result in more property interest and faster leasing activity." "Millennials in particular are having a significant impact on the market," Tesch said. "You have younger millennials that are at or approaching the time when they are looking to be first-time homebuyers, and you have older millennials that seem to be in the market to buy-up or upgrade from their current home to accommodate growing families or move to a location to better suit their needs." Danny Kattan, Founder and CEO of Sell2Rent, added that some seniors are also looking to sell and then rent back their single-family homes rather than using reverse mortgages because the latter option often involves fees and restrictions that the former option doesn't. e sell-and-rent option can also work for people who want to have more available cash but can't qualify for conventional cash-out refinancing, Kattan added. Another advantage of these properties over 1-4 family and multifamily units is that renters tend to stay longer, a trend that is increasing. "One of the largest things that that we've noticed is that the propensity for a tenant to renew their lease has significantly gone up," said Mike Tamulevich, President, National Brokerage, Marketplace Homes. "Typically, we would average in the 60% range for the tenants that are going to renew. Now, we're in the mid-to-high 70s, with another 10% going month to month." In addition to the increase in renewals, rents are appreciating a little more than 4% annually, and the value of the properties themselves continues to grow. e gains are due to a combination of low interest rates and "If I'm working remotely, why do I need to be cooped up in a one- bedroom or studio apartment in an urban center? … That's driving the demand for rental product all over the United States." —Jeff Tennyson, President and CEO, Lima One Capital