Many people think large institutional and corporate investors own the vast majority of rental property in the United States. They also believe most of those units are in big apartment buildings.
They are wrong.
According to the U.S. Department of Housing and Urban Development’s Rental Housing Finance Survey, there are 49.5 million rental housing units in the country. Of those, nearly 46 percent, or 22.8 million, are found in 1 to 4-unit buildings. Incredibly, 86.5% of all rental properties in the nation contain just one unit.
And of those small rental properties, 70 percent, or 15.9 million, are owned by individual investors.
According to the report, there are an estimated 2.2 million two to four-unit properties in the United States. Of those, 1.4, or more than half, are owned by individual investors. Title of another 354,000 are held as LLP’s, LP’s or LLC’s. Many small landlords also use this form of ownership as a means of legal protection.
What about single-family homes? Weren’t vast quantities of those purchased by institutional investors during the Great Recession? According to a recent research paper by Met Life Investment Management, as of 2022, institutions own 700,000 single-family rentals. That’s about 5% of the 14 million national single-family rentals. The same company forecasts by 2030, that number will increase to 7.6 million or more than 40% of all single-family rentals.
So for now, anyway, the vast majority of rentals found in 1-4 unit properties are still owned by mom and pop investors. As is often the case, that’s certainly not what the media would have us believe.
