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🏡 Bridging the Gap: Addressing the Lack of Software for Single-Family Rental Property Owners
Salesforce and spreadsheets work…for a while
The Single Family Rental (SFR) market is booming, making up about 16 million of the roughly 50 million rental units in the US. Moreover, the number of built-for-rent housing starts is increasing every single year. Institutional ownership in this sector is also rising, and is expected to reach 40% of all SFRs by 2030.
While PropTech has mainly focused on multi-family units due to their consolidated ownership, lower property turnover, greater consolidation, and economies of scale, single family rental ownership has its own set of benefits. Single family portfolios experience lower tenant turnover, are highly diversified, have a growing demand, are easier to liquidate, and have lower barriers to entry. It's clear that this asset class will continue to expand significantly in the coming years.
Current state of single family rental operations
Single-family rental operators use a variety of tools to manage their business, depending on the size of their portfolio. Some of the tools used include Salesforce (CRM), Yardi (PMS), spreadsheets (bookkeeping), and payment providers (collections). Many small-scale single-family operators rely on Buildium, which was built for the single-family portfolio use case.
The large institutional single-family operators–the part of the market expected to grow substantially–typically use a mix of software tools that are shoehorned together just to keep the lights on. This is a challenge that most industries have already overcome by 2023. The current state of software in the single-family rental industry is behind, arguably further behind than the rest of PropTech. With only a few purpose-built tools for this industry, there is a lot of potential for new entrants.
Largest areas of immediate opportunity
To succeed in the single-family rental industry, founders must solve some of the unique operational challenges of this sector and demonstrate value on day one. While some tools used in the multifamily industry may be useful for single-family operators, there is a need for software that is specifically tailored to the needs of single-family rental businesses.
The most promising opportunities in this space include maintenance management, resident experience, leasing operations, flexible reporting across portfolios, broad property management software, and financial management. By focusing on these areas, founders can create innovative tools that streamline operations, enhance tenant satisfaction, and drive growth in this competitive industry.