Family Homes: The Future is Single-Family Rentals
Buying a house is not the only option for families wanting a home, and real estate entrepreneurs can get into the single-family rental (SFR) market while it’s still in its infancy. That’s why Kori Covrigaru evolved his business Walkthrough, a photography-based brand supporting real estate sales, to include PlanOmatic, an SFR photography, virtual walk-through, and consulting business. Now they are “all in” on the SFR market.
“At the heart of PlanOmatic, we’re agile, and we sense opportunity,” Covrigaru explained. “We were able to get [into single-family rentals] early. While we love supporting real estate agents through our sister brand Walkthrough, we felt it important to focus on SFR.
Why single-family rentals?
How has the real estate market evolved?
With rising interest rates and high housing prices, more people put off purchasing a home than ever. Single-family rentals are now a preferred option whether potential buyers have shelved the idea completely or postponed their plans until the market cools.
“Home is home whether you rent it or own it,” Kori Covrigaru, CEO of PlanOmatic.
“The sharp increase in mortgage rates and sky-rocketing home prices are driving the demand for single-family rentals as opposed to homeownership.” Explained Michael Green, Owner of Quick Cash Homebuyers. “The current economy is characterized by high-interest rates, pushing the cost of mortgages upwards. Coupled with the rising inflation, most potential homeowners cannot afford mortgages under the prevailing economic conditions. With single-family rentals, families don’t have to worry about mortgages and rising interest rates. Moreover, the monthly housing costs for living in a single family rental are significantly lower than those for living in a purchased home.”
Catherine Mack, Co-owner of House Buyer Network said, “It has become increasingly difficult over the past few years to save the deposit to get on the property ladder. Getting $30,000 together for a dream home isn’t workable for most.” She continued her thought. “From an investors perspective, I am amazed at how many experienced investors have yet to jump on the single-family rental bandwagon. With this property, your overheads are much lower, your asset appreciates faster, and it’s more liquid than multi-family properties.”
Similarly, David Bitton, Co-founder, and CMO of DoorLoop, said the main reason for the shift to renting from buying is financial. “Finances are arguably a major factor. Most households lack the resources necessary to purchase a home. They don’t choose to rent; they cannot become homeowners since they lack the necessary funds. High unemployment rates and a lack of available jobs are current realities. When you combine this with financial distress caused by student loans and credit card debt, it’s no surprise that many families are opting to rent. Many people find that their ability to save money is being outpaced by the rate at which property prices rise. This makes renting a more cost-effective option.”
With the increased demand for single-family rentals, the median rent is going up, too. This is a great time to be a real estate entrepreneur. Demand is at an all-time high, and so are profits.
A focus on single-family rentals (SFR)
Kori Covrigaru, CEO of PlanOmatic, thinks there is a lot of opportunity in this industry. It is still on the ground floor, and investors getting into SFRs now will see exponential growth.
“We are just getting started in the single-family rental space,” said Covrigaru. “I’m excited to see what happens in the next 7-10 years in the SFR space.”
From the users’ perspective, renters seek a family home without commitment. Shri Ganeshram, CEO and Founder of Awning, said, “[Renters] don’t have to commit to that area for the long-term like you would for a purchase.”
Why is there so much growth potential for SFRs? The SFR industry is where the multi-family industry was fifteen years ago. Landlords aren’t investing in the technology to bring their SFRs to their full potential. Small upgrades like professional photography, virtual walkthroughs, smart home technology, streamlined leasing systems, and automation for rent payments and maintenance requests are the first steps SFR owners need to take to keep up with the multi-family industry.
What does the future look like for PlanOmatic?
“Renting is the gateway to homeownership,” Covrigaru said. “So it’s natural for us to start at the conception stage. Redfin is a huge brokerage. Why did they just acquire RentPath? Because renting is the gateway to homeownership.”
PlanOmatic supports single-family rentals in two ways. First, it helps property managers create beautiful listings through professional photography, virtual walkthroughs, and floor plans. Second, it consults with property managers using data and research to help them make informed decisions about their properties.
Through PlanOmatic, property managers optimize their operations and marketing to scale their business while growing their portfolio.
“We strive to help people see their homes for the first time, and many see them as a rental. Our mission is to show one million people their homes for the first time,” Kori Covrigaru.