Dallas-based Invitation Homes Inc., one of the nation’s largest single-family home rental companies, is teaming up with PulteGroup, one of the country’s top builders.
Invitation Homes plans to purchase about 7,500 new houses during the next five years that PulteGroup will design and build. The acquisition would increase the company’s property holdings by more than 50%.
The first 1,000 houses will be in Florida, Georgia, Southern California, North Carolina and Texas and will be acquired next year.
Invitation Homes already owns more than 13,000 rental houses across the country.
With home inventories in tight supply, rent home investors are increasingly turning to builders to provide a pipeline of properties.
Several major Texas homebuilders, including D.R. Horton and David Weekley, are already making plays in the rental home sector.
“We have been evaluating potential structures for participating in the single-family rental market that would seek to capitalize on our strengths in community development and new-home construction while delivering high returns,” Ryan Marshall, PulteGroup president and CEO, said in a statement. “We are excited to be working with an industry leader in Invitation Homes, and believe this relationship will allow us to increase our scale in our existing markets, make investing in larger land parcels more practical and generate attractive risk-adjusted returns.”
PulteGroup builds throughout North Texas under the Pulte Homes, Centex and Del Webb brands.
The Dallas area has already been identified as a top market for rent house construction, with builders from Tennessee and Arizona making land purchases.
With soaring prices putting homeownership out of the reach of many North Texas residents, demand for rental homes is growing. But because of the short supply of houses for sale, rental companies are turning to new construction.
Currently, there are more than 12,000 rental single-family homes being built in the U.S., according to a new report by Yardi Systems Inc.