Emerging single-family rental sector gets guidelines

by Rachel.Norvell27 Oct 2014
As further evidence that the single-family rental industry is gaining steam, a trade group formed by some of the sector’s largest owner-operators has issued a set of operating guidelines.

The National Rental Home Council (NRHC), the association for single-family rental homes in the space, was created in March by Colony American Homes, Invitation Homes, American Homes 4 Rent and Starwood Waypoint Residential Trust.

The guidelines come as experts see an increasingly bright future for securitizations in the space. To date, the 10 securitizations in the single-family rental sector since 2012, totaling $7.5 billion and backed by 38,000 properties, have been single-borrower deals. Published reports say 2015’s securitization volume could match or exceed that amount. While over the next few months the first multi-borrower deal in the sector is expected to reach the market.

“For years, the fragmented nature of this industry left residents receiving varying levels of service and care – these guidelines demonstrate our commitment to raising standards and professionalizing the single-family rental home industry,” said Matthew Beck, NRHC Spokesman.

NRHC’s operational guidelines cover four categories: home rehabilitation, property management, resident relations and legal compliance.
  • The home rehabilitation guidelines suggest single-family rental operators adopt formal procedures to ensure that homes are “habitable, functional and appealing to prospective residents and the surrounding neighborhood.”
  • “NRHC members invest considerable amounts (well over $10,000 on average per home) to renovate often-blighted properties, turning them into habitable, functioning and appealing homes for new residents,” the NRHC said.
  • The property management guidelines state that all resident-facing employees should be required to undergo Fair Housing Act training, and all employees should be required to be compliant with Fair Housing laws. The section also details suggested maintenance procedures like conducting routine site inspections and maintaining “active ownership oversight.”
  • The resident relations guidelines suggest to members that “leasing homes is a business based upon building and maintaining long-term relationships with residents. ”Single-family rental operators should aim to provide residents with a “highly satisfactory experience from the time of first contact through the selection of their home, the move-in process and for the duration of the experience.”
  • The legal compliance guidelines  state all single-family rental operators, regardless of size, should structure overall business operations to be in compliance with all applicable local, state and federal laws and should have established systems to ensure legal compliance.
"This document sends a strong, clear signal that SWAY and the rest of the NRHC membership is committed to professionalizing the single-family rental home industry for the benefit of residents and operators alike," said Gary Beasley, co-chief executive officer at Starwood Waypoint Residential Trust.

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