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Single Family Rental Property Management

March 30, 2022

Managing Single Family Rentals

Economic and demographic changes have really juiced up demand for single family rental housing (SFR) and it’s spawning excellent business opportunities for investors and property management firms.

Back in 2014, many investors and managers were wondering about the wisdom of adding single family houses to their property mix. Today, they’re reaping the rewards of acting on those real estate trends and being proactive. SFR is still highly profitable in 2021.

“SFR make up roughly 16 million units – nearly 13.0% of all housing stock and 36% of all rental households” — Pintar Investment Company. from report by Walker & Dunlap entitled MARKET INSIGHTS ON SINGLE-FAMILY RENTAL (SFR) BUILD-FOR-RENT(BFR) ACTIVITY IN THE U.S.

Definition: SFR encompasses a cluster of single family detached homes, townhomes and duplex properties. SFRs comprise about 2/3rds of the rental housing stock.

The way the pandemic has played out for residential lifestyles (people moving from high density urban housing to low density suburban and rural housing), and how single family units are in short supply, demand for SFR has generated much higher rent yields.

Demand for SFR Not Easing

Interest in SFR keeps growing and it will become a key topic in property management conferences in 2022. Yes, multifamily and apartment rentals are enjoying a recovery to, yet  their rate of price appreciation may not compare to the top SFR rental yields you can read below.

For sometime, the market has been about higher priced products whether luxury houses, vacation rentals, vehicles, house renovation, and even appliances. The lower end of the market including apartments isn’t being served given real wages are dropping and manufacturing/construction costs are too high.

For property managers and  new property management startups single family offers more opportunity for additional service revenue. This hasn’t been explored fully yet, however the growing built to rent segment is in a position to charge these add on service features.

Good Reasons to Invest in and Manage Single Family Rentals


Single family housing
is in very low supply, occupancy rates are high, and there are significant barriers to entry for large investment firms and other competitors. SFR properties are enjoying lower vacancies and longer lease periods. And these types of properties perform much better when managed using a property management software designed for this market.

Some property management firms prefer to specialize in SFR properties, a few of which will buy their own properties.

And more good news is that wages in single family neighborhoods are rising faster than rents in 379 of 495 counties studied in a 2021 SFR report by Attom Data. Of course, inflation will eat into everyone’s investment returns.  The SFR market might suffer less than others in 2022, given house renters will be willing to spend more.

Zumper reports that apartment rents are up 14% year over year, so there is no mercy for anyone who continues to live in an apartment.

There is potential for house rental price hikes as the economy recovers.

As more young families, families with children, and retirees look to rent single family homes with yards and upscale amenities on a long-term basis, more investors are looking to the SFR and BFR markets to expand their portfolios and grow their capital. — rebusinessonline.com

Best US Markets for SFR

Which US city markets offer the best rent yields this year? According to a report from AttomData, the US counties with the highest potential annual gross rental yields for 2021 are:

  • Schuylkill County, PA, in the Pottsville metro area (26.1%)
  • Bibb County, GA, in the Macon metro area (18.1%)
  • Baltimore City/County, MD (16.2%)
  • La Salle County, IL, in the Ottawa metro area (14.1%)
  • Chautauqua County, NY, in the Jamestown metro area (13.7%)

For counties with a least one million population, they found the highest potential annual gross rental yields are in:

  • Cuyahoga County (Cleveland), OH (9.9 percent)
  • Dallas County, TX (8 percent)
  • Tarrant County (Fort Worth), TX, (8 percent)
  • Franklin County (Columbus), OH (7.9 percent)
  • Bexar County (San Antonio), TX (7.9 percent)

Solving the Challenges of SFH Management

How to Grow Profit MarginsThe challenge for small business single family property managers is how to grow profitability. Single family home renters are a different group than apartment and multifamily renters.

They may be more demanding and the management/maintenance challenges are different too.

However, SFH property managers might want to look at the multifamily sector to gain insight on efficiencies and important tenant demand trends. It should be noted that tenants expectations have changed, and keeping tenants happy is a priority today.

 

“Residents who have a better rental experience want to stay longer”

 

Single family renters can and are willing to pay more and they expect more responsive services. They are in a financial position to reward you more for improvements and good service.

Turnover for single family managers is very costly even with zero vacancy rates. There are always costs when managers see turnover. SFH managers and startup entrepreneurs should look to optimize how they manage single family homes.

ManageCasa property management software is focused on the SFH market and is the perfect platform to help you succeed in 2022. Ensure you see all the value ManageCasa can deliver on the features page.

Your challenges are made easier with a next generation platform designed for simplicity and to leverage the cost efficiencies of the cloud.

Building a Better SFH Management Business

So how do you build a better single family property management business?

  • target new types of properties that require unusual service requirements
  • focus on SFR properties in demand
  • target short term townhouse condos in vacation regions (e.g., beach, mountain biking or ski resorts). Post Covid, cash rich Americans, Australians and UK residents will be eager for an active, adventure
  • investigate built to rent SFR- these growing developments need HOA managers and property managers
  • consider high end executive homes as corporate employees begin to travel and temporarily relocated again
  • investigate opportunity zone regions for tax reduction
  • weigh value of light rehabs on low end real estate regions where work from home workers seek escape from the city
  • look into expensive upgrades including roofs, landscaping and HVAC systems
  • offer digital communications and payment systems to appeal to modern tenants

For SHF Property managers, building skills to provide more services is important. Keeping up on state laws, fair housing regulations, real estate law, tax codes, demographic trends. New services for your firm would include professional marketing services, tenant communications, reno services, etc.

Keep in mind that its not always just what you do for tenants, but rather how you do it.

Smart Tools for SFR Managers

SFH management is more difficult logistically and for staying within your operating budget. Using the right property management software allows you to maintain the property well, and cut your maintenance fees, costs, and keep contractors sharp.

Efficiency is essential and that’s where your choice of property management software is so important. A software designed for SHF managers means you’re focused. For property management firms, looking to attract new clients, corporate investors will be looking at how you manage houses and the quality of property management software you use. They’re impressed with modern management practices.

If you should choose one platform to help you do it all, ManageCasa is that solution.

Our platform will be your most critical investment choice. Learn more now about ManageCasa’s impressive automation, accounting, maintenance and tenant management capabilities.

 

More insight: Property Management Companies | Single Family Rental Market | Software for Landlords |  Apartment for Rent | Property Maintenance Companies | SFR Rental Management Software | BTR Market | House Rental Sites | Increase Rental Home Yields | SFR Property Management Companies | Modern Property Management | House Rental Software  | Housing Market

 

 

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