Single-family rental (SFR) investor types, property conditions, and implications for urban neighbourhoods: evidence from Memphis, Tennessee

Abstract

Over the last decade the American single-family rental (SFR) market experienced consequential financialisation. The American SFR industry was once dominated by more local, smaller ‘mom-and-pop’ landlords. Despite this, little is known regarding the different types of SFR investors, what types of properties different investor types buy, and what types of neighbourhoods are targeted by different investor types. This article examines a majority-Black American city, Memphis, Tennessee. A city impacted significantly by the subprime mortgage crisis and this subsequent rise in SFR investors in the years that followed. Using multivariate statistics, we find institutional investors are less likely to buy a property in relatively poorer condition than categorically smaller investors. Moreover, institutional actors are more likely to purchase an SFR if it is newer, lower-valued, and located in a neighbourhood with relatively large Black or Hispanic populations and a lower-poverty rate. These findings challenge some of the existing SFR investor literature and have implications for urban planning, research, and policy.