Large-Scale Buy-to-Rent Investors in the Single-Family Housing Market: The Emergence of a New Asset Class?

FEDS Working Paper No. 2015-084

http://dx.doi.org/10.17016/FEDS.2015.084

58 Pages Posted: 6 Oct 2015

See all articles by James Mills

James Mills

Amherst Holdings, LLC

Raven Molloy

Board of Governors of the Federal Reserve System

Rebecca Zarutskie

Federal Reserve Board

Date Written: September 14, 2015

Abstract

In 2012, several large firms began purchasing single-family homes with the stated intention of creating large portfolios of rental property. We present the first systematic evidence on how this new investor activity differs from that of other investors in the housing market. Many aspects of buy-to-rent investor behavior are consistent with holding property for rent rather than reselling quickly. Additionally, the large size of these investors imparts a few important advantages. In the short run, this investment activity appears to have supported house prices in the areas where it is concentrated. The longer-run impacts remain to be seen.

Keywords: Institutional investors, buy-to-rent, ownership structure, real estate investors, rental housing, securitization, single-family rental

JEL Classification: R30, R21, G23

Suggested Citation

Mills, James and Molloy, Raven and Zarutskie, Rebecca, Large-Scale Buy-to-Rent Investors in the Single-Family Housing Market: The Emergence of a New Asset Class? (September 14, 2015). http://dx.doi.org/10.17016/FEDS.2015.084. Available at SSRN: https://ssrn.com/abstract=2669583 or http://dx.doi.org/10.2139/ssrn.2669583

James Mills

Amherst Holdings, LLC ( email )

Raven Molloy (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Rebecca Zarutskie

Federal Reserve Board ( email )

20th Street and C Streets NW
Mailstop 155-B
Washington, DC 20551
United States
202-452-5292 (Phone)

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