The Rent Roll with Jay Parsons EP#52 Scott Eisen | Q23 '25 SFR Market Update & Outlook
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Sep 25, 2025 Scott Eisen, CIO and EVP at Invitation Homes, shares his insights on the single-family rental (SFR) market, highlighting its resilience amidst a cooling homebuyer landscape. He and Jay Parsons dive into the myths surrounding SFR, emphasizing the importance of new construction over MLS purchases. Scott elaborates on capital recycling strategies, buying from builders, and how institutional investors can boost builder liquidity. They also discuss demographic trends that support SFR demand, making for an engaging and informative discussion on the future of rental housing.
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Institutions Prefer New Construction Over MLS
- Invitation Homes buys <5% of acquisitions from MLS; it focuses on new construction and builder deals.
- New builds lower capex and match yield-on-cost hurdles better than older MLS homes.
Prioritize Yield-On-Cost Over MLS Volume
- Avoid heavy MLS buying if yield-on-cost falls short due to rehab and capex needs.
- Prioritize forward buys or builder inventory to meet public REIT return hurdles.
Use Capital Recycling To Boost Returns
- Recycle capital by selling older, low-yield homes and redeploying into higher-yield new builds.
- Target higher going-in cap rates when redeploying to improve returns for shareholders.
