The single family rental (SFR) market is having a moment… that doesn’t appear to be going away anytime soon. SFR homes are quickly becoming the starter homes of previous generations. As a growing number of young people and families are opting to rent over owning a home, investors, individual buyers and builders are jumping on the bandwagon.
Much like the issue of foreclosures in the housing market, COVID-19 brought the wrinkle of collecting rent in a time when unemployment rates reached their highest rates since the Great Depression, registering at 14.8% and rental forgiveness plans went into place.
As the housing market works to stabilize itself, what lessons are to be learned from this unprecedented time? Successful businesses took the time to reimagine their strategies and understand the humanity of the situation.
William Tessar, President and CEO of Civic Financial Services, a private money lender, specializing in the financing of non-owner-occupied residential investment properties, is an industry expert in the SFR space and recently spoke on a ServiceLink’s Spotlight on SFR Webinar: Tips for Mortgage Lenders and Real Estate Investors. “There are advantages to being civil with people - especially when they are in a jam. I just think that a little bit of humanity in our space will go a long way. And those that do that are the winners in the long run.”
A recent report shows that 76% of SFR tenants enter an agreement with a plan to stay in the property for a year - with 69% of them staying in that same property for five years.1 This statistic speaks to the potential for relationship building with tenants to increase renter loyalty. Having the stability of a long-term renter ensures income consistency and saves the hassle and administrative costs of finding a new tenant.
“We have some customers that have big portfolios, upwards of 800 rentals. My advice to them is always - pick up the phone and call all 800 and get to know your renters and understand their situation as a human being and work together. When you get to know your renters, they're going to try harder, work harder, figure out a way because they want to stay in the place that they call home with their children. It’s basic human courtesy and compassion.”
Tessar goes on to acknowledge that, indeed, there are instances where tenant situations escalate to a necessary eviction. “I simply believe that with being a property owner and landlord comes the fiduciary responsibility to do everything possible to make for a smooth transition or a restructure to keep that family in that house.”
As investors and builders continue to expand on the trend to develop more single family rental options to meet the demand, community stabilization will improve with better maintained neighborhoods. Compassion is at the heart of this growth. No matter the role - whether investor lender, lender provider or investor tenant - creating transparency and having those honest conversations often yields the best results. 1 Rohde, J. (2021, August). 9 Single-Family Rental Statistics to Know for 2021. https://learn.roofstock.com/blog/single-family-rental-statistics
InsightsExercising Humanity in the Single Family Rental and Investor Space
