As Spencer Rinker tells it, he and American Housing Ventures (AHV Communities) co-founder Mark Wolf used their experience in prime apartment investing and development and simply “put “two and two together.”
The partners are developing and renting single-family homes on a mass scale by building communities that combine the operating efficiencies of managing centralized apartments with amenities one would expect to find in a master planned community of single-family houses: pool, fitness center, walking trails, and even a dog park.
It’s not rocket science,” says Rinker, president and co-founder. “We managed to figure it out and others haven’t.”
Rather than renting stacked units and sharing a common wall with neighbors, residents at Village at Vickery Grove, in San Antonio, Texas, can live in a one of 82 detached houses with three or four bedrooms, a front yard, and an attached two-car garage. AHV, which has offices in Austin, Texas and Newport Beach, Calif., recently acquired a site in Georgetown, Texas to build a rental community with 92 single-family homes to be called Park at San Gabriel and previously announced a $100-million investment to develop more rental communities in Austin and San Antonio. The developer has five Texas communities in various stages of development and construction and has its sights on building active adult 55-plus communities as well as expanding into North Carolina, Nashville, and Southern California.
“Our value proposition has been very simple from day one. Would you rather rent a single-family home with a yard and all the services of a class A apartment? Would you pick that over a two- or three-bedroom apartment? We think it’s a very straightforward value proposition,” Rinker says.
The ranks of renters has been growing annually by 770,000 households on average between 2004 and 2014, making that 10-year period the best for renter growth since the 1980s, according to the Housing Vacancy Survey. Rentals of detached single-family homes during the time span increased by 3.2 million, and the market share of that housing type among occupied rentals increased to 35 percent from 31 percent, per “The State of the Nation’s Housing” report released by Harvard University’s Joint Center for Housing Studies.
Big companies have tried to meet that demand for detached rental housing such as Starwood’s Waypoint Homes, Oakland, Calif., which bought more than 16,000 houses, many acquired through foreclosure, for leasing. Other large players include Invitation Homes, Dallas, and American Homes 4 Rent, Agoura Hills, Calif. Among the challenges for those companies, according to industry watchers, is executing an exit strategy that can monetize their property portfolio and reining in the cost to maintain scattered, decentralized sites while they are being rented.
