Recent headlines in the mainstream press have alluded to a shift in the housing market. In several instances during the past few weeks, the dismal tone that has become the standard for housing market discussions has yielded to conversations on an emerging trend: large-scale acquisitions of distressed single-family homes being repurposed (in the near term at least) for rental, that is, rent-to-buy.

Historically, rent-to-buy has been a fragmented business restricted largely to individuals buying and renting out second homes as vacation homes. Now, the numbers that are trickling in point to a new trend among sophisticated real estate investors. For example, a June article in USA Today mentioned one fund’s plans to invest more than $1.5 billion in buying and renting single-family homes, and that the fund had already acquired more than 1,000 homes in Arizona, California and Nevada. In May, The Wall Street Journal published an article about a large homebuilder and another large investment fund forming a private REIT to pursue this strategy in those markets as well.

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