Invitation Homes is throwing hundreds of millions into the American southeast with special plans for Texas.
The Dallas-based company is looking at North Texas as the ultimate single family rental market, according to Invitation CEO Dallas Tanner’s interview with the Dallas Business Journal.
Invitation, the largest owner of single-family rental homes in the country, has announced a $750 million joint venture with Boston-based Rockpoint Group.
While Invitation typically deals in homes costing around $450,000, this new venture will target homes between $500,000 and $800,000–a 30 to 60 percent increase. Whereas the company’s average customer spends “about 20 percent of their monthly income on rent,” the higher price points aim to serve customers “looking for flexibility but want a little bit more luxury,” said Tanner.
Part of Dallas-Fort Worth’s appeal for companies like Invitation are its “marquee submarkets,” like Plano, Richardson and Allen that “offer higher price point opportunities for buying but still have people who “want the leasing lifestyle,” Tanner said.
Rents for these single-family homes will between $2,500 and $3,500– 40 to 60 percent higher than the average rent in Dallas, which is $1,423.
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While Invitation and other single-family landlords are frequently accused of driving up home prices by buying up properties in tight markets, squeezing out first-time buyers, Tanner said the company’s purchases are insufficient to alter market dynamics.
“I just think that narrative isn’t true at the end of the day, if you really understand the math,” Tanner said. “There are about 6.5 million resales in the U.S. and about 1 million new buys every year with new starts. So call it 7.5 million home sales every year. We bought 4,000 homes last year. So it actually has a lot more to do with low supply and expanding demographics with millennials coming into the equation.”
As of September 2020, the company owned about 80,000 rental homes in 16 markets across the U.S., according to data cited by the Phoenix Business Journal.
In January, Sen. Elizabeth Warren (D-MA) singled out Invitation as well as Progress Residential and American Homes 4 Rent for exploiting the housing shortage, hiking fees and home prices, and evicting Americans during the pandemic.
Last year, Invitation faced a whistleblower lawsuit alleging the company duped 18 cities and counties across California out of millions of dollars in unpaid permit fees and property taxes.
[Dallas Business Journal] – Maddy Sperling