The country's single-family rental market is strong, with stable rents and favorable fundamentals.
Data from analytics firm CoreLogic shows closings moving at a reasonable pace and relatively low supply as the market for real estate-owned properties is positioned to reach as high as $100 billion this year. Florida and the Midwest are leading the nation in terms of profitability for investors.
The federal REO-to-rental conversion program is contributing to high potential returns that exceed the performance of many other asset classes, according to CoreLogic. The initiative provides an opportunity for large investors to participate on a scale that was previously less practical.
The Federal Reserve reports that the majority of recently foreclosed borrowers move into single-family rentals, a major change as more than 3 million homeowners have become potential renters in the past five years. These changes are creating more opportunity for investors and rental property management firms to profit through single-family rentals than in the past.
CoreLogic says the strongest markets for this type of investment possess many available homes and are experiencing high capitalization rates.