How buy-to-rent investors are changing North Carolina neighborhoods

<p>In 2018, nearly one in five “starter homes” – or houses priced at the bottom third of the local market – were bought by investors rather than prospective homeowners. While investors take many forms such as “flippers” or owners that turn properties into Airbnbs, a growing cohort of companies are reshaping neighborhoods by converting single-family homes into long-term rental properties.</p> <p>In October 2020, Invitation Homes Inc, the nation’s largest owner of single-family rental properties, announced that it would invest $1 billion towards expanding it’s 80,000-unit portfolio. Invitation Homes – and other large investors like it – operate as Real Estate Investment Trusts (REITs) that pull together funds from investors to acquire and often manage real estate. While REITs have been around for a long time and helped invest in commercial, hospitality, and industrial real estate, some of the country’s fastest growing REITs specialize in acquiring previously owner-occupied homes in single-family neighborhoods and converting them into rental properties.</p> <p>There are a few reasons why buy-to-rent REITs are expanding their operations, including economic and technological changes that make it easier for investors to acquire and manage thousands of properties across a metro area. Research shows that the ownership model grew in the early years following the Great Recession, when large numbers of low-income households lost their homes to foreclosure. Investors were able to convert single-family homes into rentals because of their low acquisition prices and growing demand as newly foreclosed homeowners converted to renters. One study estimated that over 75% of households that had lost their homes in [...]</p>