The 7th Annual Single-Family Rental Forum (East) took place this week in Hollywood, FL and team Roofstock returned with some new industry insights.
Here's what you need to know:
Key takeaways - State of The Industry
This panel included execs from Roofstock, SVN, 5 Arch, Amherst Capital, CoreVest Finance, Lima One Capital, and Renters Warehouse.
- Big data is helping investors with renovation estimates by leveraging AI to improve those estimates. With a tech focused company like Roofstock, you don’t need a huge team to gain leverage.
- Investors are seeing the single-family rental (SFR) space as an alternative to equities. Equities and SFR returns have both been solid over the last several decades.
- There is a high level of demand for SFRs amongst institutions and there is liquidity in the market. Companies can attract these investor groups by productizing these SFRs, such as packaging portfolios with property management already in place, financing in place, and even selling fractionalized SFRs.
- Many new investors are entering the market now that they have been considering investing in SFRs for the last 10 years. Pension funds, sovereign wealth funds, European money, and even parts of Asia like Japan are showing interest. US housing is particularly attractive to them as we are seeing solid growth. These parties didn’t believe you could invest at scale, but technology is helping make that possible. Now global firms want to invest and their goals are very achievable.
Key takeaways - Opportunity Zones
This panel included execs from Roofstock, GTIS Partners, PIA Group USA, Real Wealth Network, and The Promise Homes Company.
- Although the Tax Cuts and Jobs Act was signed into law in 2017, the IRS is still clarifying the code. However, we are finally starting to see funds come forth now that there is ongoing clarification.
- Local municipalities are tacking on tax benefits to provide further incentives for improving the areas on top of Opportunity Zone designations. Baltimore and Atlanta are prime examples.
- Not all Opportunity Zones are treated equally, and some will be profitable for investors while others will not.
Key takeaways -iBuyers & Valuation Automation
This panel included execs from Roofstock, Offerpad, Zillow Group, Entera, Invitation Homes, and Marketplace Homes.
- Technology has created the ability to drive the volume of investing, which couldn’t be done 20 years ago.
- Buyers are welcoming the iBuyer model.
- When asked how quickly they can underwrite valuations and how much human interaction is needed to get reliable and accurate values, the answers from the panel varied from full automation to hours per property. All panelists agreed that they are triangulating values with many sources including much of their own data that they have collected over the years.