A billionaire has just snapped up 10,000 single-family homes to in order to do them up and rent them out, becoming the second-biggest owner of rental homes in the US in one fell swoop.
The billionaire in question is none other than 79-year old B. Wayne Hughes, a man who ought to know a thing or two about rentals, seeing as he built his fortune on the back of his pioneering warehouse rental firm Public Storage, a company he founded 40 years ago that has gone on to become the world’s largest storage-rental firm.
For his latest venture, Mr. Hughes has established a new company, American Homes 4 Rent, which was founded last year as a non-public REIT and has been financed to the tune of $600 million by the Alaska Permanent Fund Corp., an investment firm which pays out annual dividends to Alaska residents. Through the company, Hughes is hoping to exploit the housing crash and make a 6% to 7% return on his investment through renting out his newly acquired homes to American families in need.
Most of the new properties were foreclosures acquired at auctions, and American Homes 4 Rent has been particularly active in some of the US’s hardest hit regions, such as Arizona, California, Florida, Georgia, Illinois, Indiana, Ohio, Nevada and Texas. Hughes has followed a specific model, only targeting homes that have been built in the last twenty years, which belong to a homeowner association, and have at least three bedrooms and two bathrooms.
Paul Saylor, chairman of CS Capital Management Inc., which manages the Alaska fund, had this to say about the new venture:
“Wayne founded Public Storage at a time when the industry was run by moms and pops out of their garages, and it’s kind of the same pattern. Buying single-family homes has been dominated until very recently by small investors across the country doing it locally.”
Many of the new homes have already been done up and kitted out, ready to move into by suitable tenants. If you happen to be looking for a home to rent, you might just find one here.