How Many Homes in the US Are Owned by Corporations?

The landscape of homeownership in the United States is complex, with various entities participating in the housing market. Public interest has grown regarding the role of corporate entities in acquiring residential properties. Understanding this involvement requires examining available data and the characteristics of these corporate players.

The Scale of Corporate Homeownership

Corporations are estimated to own approximately 10% of single-family homes in America, a slight decrease from 11.5% in 2014. While this percentage might seem modest, the impact can be concentrated in specific areas and property types.

Institutional investors, defined as firms owning at least 1,000 homes, account for approximately 0.67% of the total U.S. single-family housing stock, or about 600,000 homes. A broader definition, including investors owning at least 100 homes, suggests they own roughly 3.8% of the 15.1 million single-unit rental properties nationwide. These larger investors collectively owned around 450,000 single-family homes by 2022, with the five largest holding nearly 300,000.

A substantial portion of rental properties are owned by individuals or small businesses. Individual investors owned over 70% of rental properties in 2020, and over 70% of rental units in properties with four or fewer units. Limited liability partnerships, limited partnerships, and limited liability companies (LLCs) collectively owned 15.4% of rental properties, but a larger share of units in properties with 100 or more units.

Understanding Corporate Entities in Real Estate

Corporate entities in real estate use various legal structures and investment strategies. The Limited Liability Company (LLC) is favored by individual and smaller group investors. LLCs offer liability protection, separating personal assets from business liabilities. This structure also provides flexible tax treatment, allowing profits and losses to “pass through” directly to owners’ personal tax returns, avoiding corporate-level taxation.

Real Estate Investment Trusts (REITs) are a prominent corporate vehicle for larger-scale, pooled investments. REITs are companies that own, operate, or finance income-producing real estate and are typically publicly traded. Single-Family Rental (SFR) REITs focus on acquiring and leasing detached homes, generating income through rental payments distributed to shareholders as dividends. These entities offer investors exposure to real estate without direct property ownership responsibilities.

Private equity firms raise capital from high-net-worth individuals and institutional investors, such as pension funds. These firms engage in active management, acquiring property portfolios with strategies ranging from core investments in stable assets to opportunistic investments. Private equity real estate investments typically involve substantial capital commitments and long lock-up periods. Unlike publicly traded REITs, private equity funds are less regulated and generally only accessible to accredited investors.

Where Corporations Are Buying Homes

Corporate home purchases concentrate in specific regions and metropolitan areas. The Southeast and Southwest United States have seen a higher prevalence of corporate homeownership. These regions offer conditions attractive to investors, such as growing populations, strong rental demand, and favorable market dynamics.

Metropolitan areas frequently targeted by corporate buyers include Atlanta, Georgia; Jacksonville, Florida; Charlotte, North Carolina; and various cities in Texas like Dallas and Tarrant County. Institutional investors owned an estimated 25% of Atlanta’s single-family rental housing market and 21% of Jacksonville’s as of 2022. This concentration allows these entities to achieve economies of scale and exert greater market influence.

Areas are selected based on readily available market data, which facilitates investment decisions. Corporate investors are attracted to areas with rising household formation and strong housing and rental markets. Their ability to make all-cash offers provides a competitive edge.

What Types of Homes Corporations Acquire

Corporate investors target residential properties that align with their objective of generating rental income. Single-family homes are a primary acquisition target, especially those suitable for long-term rental. These properties often serve as rental units for families seeking the space and privacy of a stand-alone home.

Larger institutional firms, such as Invitation Homes and American Homes 4 Rent, acquire homes averaging between 1,850 and 2,000 square feet, often built after 2000. Midsize firms may focus on slightly smaller and older properties. Many corporate investors aim for properties in the mid-range of the local market, frequently seeking three-bedroom, two-bathroom houses in desirable neighborhoods.

The investment approach often involves a “buy-to-rent” strategy, where properties are purchased to be converted into rental units. “Build-to-rent” has also gained prominence, with companies constructing new homes specifically for the rental market. This allows corporate entities to expand their rental portfolios and meet the growing demand for single-family rental housing.