YouTube Enabled Institutional Investing in Single-Family Rentals

Wasn’t it the Great Recession and collapse of the home market that sparked institutional investments into single-family rentals? Well, yes and no.

A sudden wave of foreclosures did open up value to be had, but that was only a part enabler. A company could get the best price for swamp land, but if it couldn’t find a way to make profitable use, it doesn’t matter.

According to Allan Swaringen, president and CEO of JLL Income Property Trust, which owns about 4,000 single-family home rental units, the real trick was YouTube. Along with other technology that made the business efficient.

Multifamily buildings can advertise, post banners, and otherwise market themselves because the costs are amortized across all the units in a building. “You don’t do any of that to rent a single-family home,” Swaringen tells GlobeSt.com. It’s too expensive and scattershot.

“It’s all done through YouTube videos,” he says. “They can tour the building” from anywhere, see available units, other parts of the building, facilities, and so on. “If you think about the change of technology with drone videos and making all of that accessible on cell phones, that makes single family rents much more easily manageable.” 

An institutional investor can often forego traditional leasing agents driving from one spot to another to meet potential tenants. “If anything, they’re sitting in an office in a call center,” Swaringen says.

Technology has advantages beyond showing properties. “It’s made the inspection of the house simpler, the leasing,” Swaringen adds. “It’s all done remotely and with videos, which is just not something you could have necessarily done ten years ago. With bandwidth increasing and technology increasing. It’s not been talked a lot about in terms of why the SFR market is attracting institutional capital because the efficiencies are making it more investable.”

He argues that even maintenance is easier. One challenge of single-family house rentals is that an employee would have to travel from one place to another, taking care of problems along the way. But YouTube, which has become a treasure trove for the do-it-yourselfer, enables the inclination of house renters to act more like owners and to take care of the property.

“In our apartment communities, most renters will call the maintenance man,” says Swaringen. “The single-family renter maintains it to a higher standard, they’re comfortable taking care of it and fixing minor problems.”

Point the renter to videos on YouTube about how to take care of common tasks and they well might. “A roof leak? They’re going to call our maintenance staff,” Swaringen says. But changing filters in furnaces, changing light bulbs, changing fuses, unplugging toilets? Yes.