2023 has certainly been a wild one for the real estate industry. With housing prices rising and a supply shortage, the rental market has exploded to alleviate those needs.
SmartRent has observed trends affecting the single-family rental and build-to-rent markets, giving us insights into what to expect with the year to come. Now, we’d like to share our informed predictions for the new year.
Single Family Rentals Will Continue to Grow As an Asset Class
The single family rental market has grown significantly over the past couple of years and is only expected to grow more as a powerful asset class between scattered site single family rental properties and build-to-rent communities.
Walker & Dunlap estimate that between 5-10 percent of all new builds belong to the build-to-rent market. This growth is in response to renters’ demand for more space and yards that are difficult to find in multifamily settings. This shift is now being seen as a new lifestyle of long-term renting across empty-nesters, millennials and gen-z alike.
As demand rises, investors are now jumping at the opportunity to tap this market and expand their portfolios. The current market is valued at about 3.4 trillion dollars and is only expected to grow as investors pour dollars into the market. Whether in newly constructed communities, or older homes requiring rehab, investors are diving into the opportunity leading to greater competition amongst each other.
This trend also allows investors the opportunity to create modern smart homes that are highly sought after by renters throughout the country. Adding these modern touches will give them a competitive advantage and attract the right residents who are willing to pay higher rents for a smart home.
Single Family Rentals Owners Will Rely on Data & Analytics to Manage Their Portfolios
As portfolios grow, single family rental owners will need to become more agile and more efficient. As such, 2022 may see the growth of strong data and analytics tools as part of the SFR tech stack to help owners effectively manage their portfolio of homes.
Implementing the right technology into their strategy will help property teams manage growing portfolios without an army of staff present. In addition, these analytics and data gathering platforms can help teams work more efficiently and see more profitable operations while also building Net Operating Income (NOI).
SmartRent’s Community Manager platform answers that exact need. This robust proptech platform boasts an easy-to-use dashboard that gives property teams a birds-eye view of their community. While creating operational efficiency amongst staff, maintenance teams and vendors, while gathering valuable data that owners can use to make strategic decisions for their portfolios.
A Greater Demand for Renting
As housing prices continue to rise and many Americans are still recovering from the pandemic, a greater number of renters will be obliged to keep renting. As a result, some renters are actually beginning to prefer long-term renting. This alone opens the door to single family rentals as renters are increasingly interested in more space.
For instance, single family homes are more attractive to young families who now find themselves working remotely while also caring for children. While purchasing a home may not be attainable at the moment, renting one is undoubtedly a more affordable option.
A study conducted by Satisfacts/ApartmentRatings on multigenerational renters discovered that Gen Z and millennials want single family homes upon graduation over an apartment. This gives investors a great opportunity to tap into this market, targeting younger renters looking to put down roots without committing to a mortgage.
Connected Homes Are Now a Standard
While smart homes were once a thing of the movies, 2021 certainly brought that to reality. Smart home technology has drastically increased in popularity over the last few years as home buyers and renters are now expecting smart homes as a standard. Renters are even willing to pay top dollar for homes that are equipped with smart home devices.
And while smart home devices are highly sought after, 2022 will bring a shift to a truly connected home where IoT devices work seamlessly together, delivering actual automation that saves time and sometimes even money. This means total integration. From smart lighting, thermostats, and security cameras, renters are looking to use their services and products more easily and efficiently, rather than on multiple apps and platforms. In addition, they’re looking for more streamlined use and interaction of their devices for a truly smart home experience.
SmartRent’s suite of smart home devices and solutions, like the SmartRent app, grant renters the integration they’re looking for. Residents can easily control their devices and create automation all from the comfort of their mobile phones.
Whether within their home or on the go, residents can adjust temperature settings, send access codes and turn lights off or on. While renters are now hungry for smart homes that are completely connected, SmartRent has always worked hard to offer this experience to residents across different verticals.
Preparing For the New Year
As the competition begins to tighten over the next year and portfolios continue to grow, SmartRent is the perfect partner to help scale with. Our products offer insights, efficiency and the smart home experience renters are looking for.
Schedule a quick demo to learn more about how our solutions can take your portfolio to the next level throughout the next year.