As the number of for-sale homes listed on the multiple listing service (MLS) drops, the number of single-family homes up for rent has been gradually increasing, RISMedia reports.
Single-family home rentals are a growing business, as more investors buy up foreclosures at bargain prices and then transform them into rentals.
About 16 percent of all listings on the MLS are rentals, which is more than double the number of rentals listed in 2006, RISMedia reports. Single-family rentals are often listed on the MLS by real estate brokers, whereas multifamily units typically aren’t.
The single-family rental market now accounts for “21 million rental units or 52 percent of the entire residential rental market,” according to a new study by CoreLogic.
Single-family rentals are usually very differently from multi-family homes. For example, rents for single-family rentals typically are 1.5 to 1.6 times higher than multifamily homes. Also, families and prior home owners tend to be attracted to single-family rentals whereas multifamily tenants tend to be younger, more mobile people who have never owned a home before.
Many of the single-family rental tenants nowadays are former home owners who had faced foreclosure and can no longer afford to own. According to CoreLogic, more than 3 million home owners have been turned into renters over the past five years due to foreclosure.
Source: “Single Family Rentals Now Exceed Multifamily,” RISMedia (April 23, 2012)