Investments in apartment buildings dedicated exclusively to rental, or multi-family, are a fairly widespread and well-known business. But in the US, we have been seeing a boom in single-family rentals (SFR) in recent months. The pandemic has led a growing number of Americans to seek larger homes with yards or gardens on the outskirts of cities. At the same time, low interest rates and extra income for many families as a result of federal government financial aid have triggered a surge in demand for home purchases. Supply has not grown at the same pace: according to mortgage company Freddie Mac, the single-family housing deficit in the US currently stands at 3.8 million units. 

This has led to a sharp increase in housing prices, prompting a growing number of families to seek rental options. And this is where the business of investing in rental housing began to boom. In recent months, construction companies involved in this business, such as Lennar Corp. and DR Horton, have been joined by investment banks and institutional investors, such as the Royal Canadian Mounted Police pension fund. 

One indication of the temperature of the business was the purchase of Front Yard, one of SFR's leading companies in the US, by investment firms Pretium and Ares: after reaching an initial agreement in October 2020, they had to modify it at the end of November, increasing the price per share from US$13.5 to US$16.25 in cash. This meant an increase in the premium on the share price from 36% in the October offer to 63% in the revised November agreement.