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Build-To-Rent Developers See Opportunity In Growing Renter Class



Owning a detached, single-family house doesn’t quite have the appeal it once did. Still, millions of Americans want to live in detached residences, even if they don’t want to own them, and developers are stepping up to offer build-to-rent communities.

No single factor is driving demand for single-family rental housing, experts say. Partly, the large millennial demographic is looking for larger places to live but not always to buy, either because they can’t afford it or don’t want to be tied down. The coronavirus pandemic has also spurred new interest in single-family houses and the distance they provide.


Courtesy of Christopher Todd Properties

Christopher Todd Communities at Stadium, a built-for-rent property of 300 houses in Glendale, Arizona.

Currently, about 6% of new single-family homes are developed specifically to be rented, according to RCLCO Real Estate Advisors Managing Director Todd LaRue. At that rate of development, about 700,000 new single-family housing units for rent will be developed over the next 10 years. 

“That isn’t going to be enough, considering the projected growth in demand for single-family rental units,” LaRue said. “That means that there will be a strong opportunity for developers of this kind of product in the coming decade.”

The United States is more a nation of renters than it used to be. Beginning with the Great Recession, the number of Americans owning their own homes has decreased. As of the third quarter of 2020, the Census Bureau reports, 67.4% of U.S. households owned, an uptick from the mid-2010s, but still well below the mid-2000s, when the rate nearly touched 70%.

Single-family rentals represent roughly 35% of all U.S. rented housing units, according to a 2018 study published by the National Bureau of Economic Research. That totals more than 12 million single-family rentals. Most of these rentals are still in the hands of small owners, many of whom rent out a single house, but corporate ownership of single-family housing has grown since the post-2008 housing crisis.

A study published by Curbed in 2018 found that about 200,000 single-family homes are owned by corporate investors such as Invitation Homes, American Homes 4 Rent, Progress Residential, Main Street Renewal and Tricon American Homes. They took the opportunity to buy properties that were foreclosed on in the early 2010s, the result of the dire economic straits so many people found themselves in.

As the economy improved — until the pandemic hit — these corporate buyers were less able to find houses to buy. But the idea of renting a detached house, even from a corporate entity, had become more established, especially among millennials.

“That generation is now advancing to a later life stage, where the family formation is taking hold, or just advancing beyond the age at which they want to live in standard apartments,” LaRue said.

At the same time, the economics of homeownership are often against them, faced with incomes and debt loads that don’t allow them to accumulate the necessary cash for down payments to enter the for-sale housing market in many places, LaRue said. Especially not detached, for-sale properties with yards.

But that isn’t the entire picture for single-family renters. Many renters at Christopher Todd Communities are perfectly able to buy a house, Christopher Todd Properties CEO Todd Wood said, but they prefer not to, at least for now. At the same time, they want to live in one.

“They saw what happened back in 2007, and they don’t want to be tied down to a 30-year mortgage,” Wood said. “They want to be mobile in their work environment, be able to get up and move. So from a millennial standpoint, a rental house that gives them space and amenities is an attractive solution. Besides, renting doesn’t have a negative stigma anymore.”

Then there is the matter of distance from one’s neighbors. Traditionally, that meant avoiding noise and other distractions. Currently, that means avoiding disease as well. The pandemic might end next year, but the appreciation of distance might not.

“We’re in a situation now where people are looking for less density,” NorthMarq President of Investment Sales Trevor Koskovich said. “They don’t want to use any kind of common areas, but they do want direct access from their parking spot to the front door without having to touch anything or see anyone. There’s an insatiable appetite in the market for that kind of space, and for-rent houses will help supply it.” 

For-rent housing development includes what might be called “horizontal apartments,” LaRue said. That means the unit sizes are very similar in size to traditional apartments, but they are slightly detached from one another or in the form of townhouses or duplexes. That kind of development has been around for many years.


The up-and-coming developments are essentially communities of traditional, single-family detached houses, only built for rent rather than for sale. They often tend toward the luxury end of the spectrum, LaRue said, but not always, and typically compete with apartments by offering amenities.

“The question now is how much builders are willing to pivot to away from for-sale towards the rental product,” LaRue said.

Early indications are that some developers are willing to jump into the game. 

Phoenix-based Christopher Todd Properties develops for-rent, single-family housing communities in its home market, and then sells the communities in toto to investors. This year alone, the company has sold five Christopher Todd Communities in the greater Phoenix market totaling 943 houses. 

“Investor appetite for built to rent has ballooned recently,” Koskovich said. “Not only are we seeing demand from institutional investors, there is also interest from lenders to finance these kinds of deals.”

Recently, Koskovich brokered the sale of Christopher Todd Communities At Stadium, a 313-unit community of single-family houses in Phoenix. The property includes one- and two-bedroom detached houses with private backyards. 

Measuring a bit more than 1K SF, the two-bedroom houses rent for about $1,900. At that price point, they rent for more than most other multifamily properties in that part of greater Phoenix, though those tend to be smaller one-bedroom units. 

Single-family houses listed for rent in the neighborhood on Zillow tend to be a little larger — but in the same ballpark — as the Christopher Todd houses, though without many of the apartment-property style amenities, such as gated entry, a fitness center and a swimming pool.

“We’re fortunate in that when we compare ourselves to a classic multifamily properties, we’re usually able to get about 25% to 30% higher rent rates,” Wood said. “Also, our retention rates are almost 50% higher than traditional apartments.”

“Investors are seeing this type of asset as one that they can buy and hold, benefiting from their lower turnover and some operational efficiencies,” Koskovich said. “So there’s been demand for the properties, and I think that’s going to continue to grow in many markets going forward.”

Another major player in the single-family rental space is also a Phoenix operation, NexMetro Communities, which has developed 11 for-rent projects under the Avillia brand in its home market, along with properties in Tucson, Denver and Dallas-Fort Worth. This year, the company entered the Florida market for the first time, breaking ground on 152 houses on 13 acres in Odessa, which is in exurban Tampa.

“More consumers, including a growing number of baby boomers who have owned homes for many years, are choosing to rent rather than own a home,” NexMetro CEO Josh Hartmann said. “Demand for low-density rental housing is outpacing supply. Even as mortgage rates plunge, the demand for single-family rental home neighborhoods remains strong.”

NexMetro has long identified central Florida as a good location for its Avilla brand, Hartmann said, citing a strong local economy, including high rates of household formation, but also the availability of land. 

In June, El Paso, Texas-based Hunt Cos. formed a new division, Avanta Residential, to develop single-family rental communities. The company will work with investors, homebuilders and land developers to deliver single-family rental homes toward the more affordable end of the spectrum, though it hasn’t set rental rates yet.

“We’re seeing a real shift in the mindset about home rental and ownership,” Avanta Residential President Jim Dobbie said. “Particularly millennials seem to want the flexibility of renting, but with the privacy that typically comes with homeownership.”

Not everywhere is primed for for-rent single-family housing development, Koskovich said. 

“We’re not seeing too much of these kinds of developments in California, for example, with its impact fees and regulations,” he said. “Build for rent is going to happen in places where for-sale housing development is strong as well, such as Arizona and Texas. Places with strong local economies, developer-friendly governments and available land.” 

There has been sporadic pushback against rental developments as well, Koskovich said, though it isn’t pronounced in the markets where they would do well anyway.

“As the president of the MultiCultural Real Estate Alliance for Urban Change that promotes homeownership, we disapprove of the programs that encourage households to spend $2K to $3K or more a month to rent,” Los Angeles-based real estate broker Carmen Hill said.

“We encourage households to take the steps to overcome their obstacles,” Hill said. “Those include working with a credit counselor if they have bad credit or take advantage of education programs at the local community colleges if a better job is needed to qualify.”

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If You Want Consumers to Lose, Network Regulation is a Must – Digital Transactions



After the current U.S. Congress was sworn in, a predictable chorus of merchants, lobbyists, and lawmakers demanded new interchange price caps and other government mandates to decrease credit card interchange fees for merchants. The tired attacks on credit cards are an easy narrative that focuses almost exclusively on the cost side of the ledger, while completely ignoring the cards’ important role in the economy and the regressive effects of interchange regulation. 

To lawmakers blindly acting on behalf of retailers, regulation is a brilliant idea—regardless of how it affects their constituents. For decades, they have promised these interventions would eventually benefit consumers. But the lessons from the Durbin Amendment in the United States and price cap regulation in Australia is clear. Although some policymakers bemoan the current economic model, arbitrarily “cutting” rates for the sake of cuts completely ignores the economic reality that as billions of dollars move to merchants, billions are lost by consumers. 

For the uninitiated, let’s break down what credit interchange funds: 1) the cost of fraud; 2) more than $40 billion in consumers rewards; 3) the cost of nonpayment by consumers, which is typically 4% of revolving credit; 4) more than $300 billion in credit floats to U.S. consumers; and 5) drastically higher “ticket lift” for merchants. 

Johnson: “To lawmakers blindly acting on behalf of retailers, regulation is a brilliant idea—regardless of how it affects their constituents.”

These are just some of the benefits. If costs were all that mattered, American Express wouldn’t exist. Until recently, it was by far the most expensive U.S. network. Yet, merchants still took AmEx because they knew the average AmEx “swipe” was around $140, far more than Visa and Mastercard. 

Put simply, for a few basis points, interchange functions as a small insurance policy to safeguard retailers from the threat of fraud and nonpayment by consumers. Consider the amount of ink spilled on interchange when no one mentions that the chargeoff rate for issuing banks on bad credit card debt exceeds credit interchange.

Looking abroad, interchange opponents cite Australia, which halved interchange fees nearly 20 years ago, as a glowing example of how to regulate credit cards. In truth, Australia’s regulations have harmed consumers, reduced their options, and forced Australians to pay more for less appealing credit card products. 

First, the cost of a basic credit card is $60 USD in many Australian banks. How many millions of Americans would lose access to credit if the annual cost went from $0 to $60? Can you imagine the consumer outrage? 

In a two-sided market like credit cards, any regulated shift to one side acts a massive tax on the other. For Australians, the new tax fell on cardholders. There, annual fees for standard cards rose by nearly 25%, according to an analysis by global consulting firm CRA International. Fees for rewards cards skyrocketed by as much as 77%.

Many no-fee credit cards were no longer financially viable. As a result, they were pulled from the market, leaving lower income Australians, as well as young people working to establish credit, with few viable options in the credit card market.

Even the benefits that lead many people to sign up for credit cards in the first place have been substantially diluted in Australia because of the reduction of interchange fees. In fact, the value of rewards points fell by approximately 23% after the country cut interchange fees.

Efforts to add interchange price caps would have a similar effect here in the U.S. A 50% cut would amount to a $40 billion to $50 billion wealth transfer from consumers and issuers to merchants. For the 20 million or so financially marginalized Americans, what will their access to credit be when issuers find a $50 billion hole in their balance sheets? 

The average American generates $167 per year in rewards, according to the Consumer Financial Protection Bureau. Perks like airline miles, hotel points, and cashback rewards would be decimated and would likely be just the province of the rich after regulation. Many middle-class consumers could say goodbye to family vacations booked at almost no cost thanks to credit card rewards.

As the travel industry and retailers fight to bounce back from the impact of the pandemic, slashing consumer rewards and reducing the attractiveness of already-fragile businesses is the last thing lawmakers and regulators in Washington should undertake.

Proposals to follow Australia’s misguided lead in capping interchange may allow retailers to snatch a few extra basis points, but the consequences would be disastrous for consumers. Cards would simply be less valuable and more expensive for Americans, and millions of consumers would lose access to credit. University of Pennsylvania Professor Natasha Sarin estimates debit price caps alone cost consumers $3 billion. How much more would consumers have to pay under Durbin 2.0?

Members of Congress and other leaders should learn from Australia and Durbin 1.0 to avoid making the same mistake twice.

—Drew Johnson is a senior fellow at the National Center for Public Policy Research, Washington, D.C.

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Increase Your Credit Score With Michael Carrington



More than ever before, your debt and credit records can negatively impact you or your family’s life if left unmanaged. Sadly, many Americans feel entirely helpless about their credit score’s present state and the steps they need to take to fix a less-than-perfect score. This is where Michael Carrington, founder of Tier 1 Credit Specialist, comes in. Michael is determined to offer thousands of Americans an educated, informed approach towards credit restoration.

Michael understands the plight that having a bad credit score can bring into your life. His first financial industry job was working as a home mortgage loan analyst for one of the nation’s largest lenders. Early on, he had to work a grueling schedule which included several jobs seven days a week while putting in almost 12-hour days to make $5,000 monthly to get by barely.

“I was tired of living a mediocre life and was determined to increase the value that I can offer others through my knowledge of the finance industry – I started reading all of the necessary books, networking with industry professionals, and investing in mentorship,” shares Michael Carrington. “I got my break when I was able to grow a seven-figure credit repair and funding organization that is flexible enough to address the financial needs of thousands of Americans.”

With his vast experience in the business world, establishing himself as a well-respected business leader, Michael Carrington felt he had the power to help millions of Americas in restoring their credit. Michael learned the FICO system, stayed up to date on the Fair Credit Reporting Act (FCRA), found ways to improve his credit score, and started showing others.

The Tier 1 Credit Specialist uses a tested and proven approach to educate their clients on everything credit scores. Michael is leveraging his experience as a home mortgage professional, marketing executive, and global business coach to inform his clients. He and his team take their time to carefully go through their client’s credit records as they try to find the root of their problem and find suitable financial solutions.

The company is changing lives all over America as it helps families and individuals to repair their credit scores, gain access to lower interest rates on loans and get better jobs. What Tier 1 Credit Specialists is offering many Americans is a chance at financial freedom.

Michael Carrington has repaired over $8 million in debt write-ups and has helped fund American’s with over $4 million through thousands of fixed reports. “I credit our success to being people-focused,” he often says. “The amount of success that we create is going to be in direct proportion to the amount of value that we provide people – not just our customers – people.”

Because of its ‘people-focused goals, the Tier 1 Credit Specialist is determined to help millions of Americans achieve financial literacy. It is currently receiving raving reviews from clients who are completely happy with the credit repair solutions that the company has provided them.

Today, Michael Carrington is continuing with a new initiative to serve more Americans who suffer from bad credit due to little or no access to affordable resources for repair.

The Tier 1 Credit Socialist brand is changing the outlook of many families across America. To do this, the company has created an affiliate system that will provide more people with ways of earning during these tough economic times.

As a well-respected international business leader and entrepreneur with numerous achievements to his name Michael Carrington aims to help millions of Americans achieve the financial freedom, he is experiencing today. Tier 1 Credit Socialist is one of the most effective credit repair brands on the market right now, and they have no plans for slowing down in 2021!

Learn more about Michael Carrington by visiting his Instagram account or checking out the Tier 1 Credit Specialist website.

Published April 17th, 2021

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Does Having a Bank Account With an Issuer Make Credit Card Approval Easier?



Better the risk you know than the one you don’t.

When it comes to personal finance, nothing is guaranteed. That goes double for credit. That’s why, no matter how perfect your credit or how many times you’ve applied for a new credit card, there’s always that moment of doubt while you wait for a decision.

Issuing banks look at a wide range of factors when making a decision — and your credit score is only one of them. They look at your entire credit history, and consider things like your income and even your history with the bank itself.

For example, if you defaulted on a credit card with a given bank 15 years ago, that mistake is likely long gone from your credit reports. To you and the three major credit bureaus, it is ancient history. But banks are like elephants — they never forget. And that mistake could be enough to stop your approval.

But does it go the other way, too? Does having a bank account that’s in good standing with an issuer make you more likely to get approved? While there’s no clear-cut answer, there are a few cases when it could help.

A good relationship may weigh in your favor

Credit card issuers rarely come right out and say much about their approval processes, so we often have to rely on anecdotal evidence to get an idea of what works. That said, you can find a number of stories of folks who have been approved for a credit card they were previously denied for after they opened a savings or checking account with the issuer.

These types of stories are more common at the extreme ends of the card range. If you have a borderline bad credit score, for instance, having a long, positive banking history with the issuer — like no overdrafts or other problems — may weigh in your favor when applying for a credit card. That’s because the bank is able to see that you have regular income and don’t overspend.

Similarly, a healthy savings or investment account with a bank could be a helpful factor when applying for a high-end rewards credit card. This allows the bank to see that you can afford its product and that you have the type of funds required to put some serious spend on it.

Having a good banking relationship with an issuer can be particularly helpful when the economy is questionable and banks are tightening their proverbial pursestrings. When trying to minimize risk, going with applicants you’ve known for years simply makes more sense than starting fresh with a stranger.

Some banks provide targeted offers

Another way having a previous banking relationship with an issuer can help is when you can receive targeted credit card offers. These are sort of like invitations to apply for a card that the bank thinks will be a good fit for you. While approval for targeted offers is still not guaranteed, some types of targeted offers can be almost as good.

For example, the only confirmed way to get around Chase’s 5/24 rule (which is that any card application will be automatically denied if you’ve opened five or more cards in the last 24 months) is to receive a special “just for you” offer through your online Chase account. When these offers show up — they’re marked with a special black star — they will generally lead to an approval, no matter what your current 5/24 status.

Credit unions require membership

For the most part, you aren’t usually required to have a bank account with a particular issuer to get a credit card with that bank. However, there is one big exception: credit unions. Due to the different structure of a credit union vs. a bank, credit unions only offer their products to current members of the credit union.

To become a member, you need to actually have a stake in that credit union. In most cases, this is done by opening a savings account and maintaining a small balance — $5 is a common minimum.

You can only apply for a credit union credit card once you’ve joined, so a bank account is an actual requirement in this case. That said, your chances of being approved once you’re a member aren’t necessarily impacted by how much money you have in the account.

In general, while having a bank account with an issuer may be helpful in some cases, it’s not a cure-all for bad credit. Your credit history will always have more impact than your banking history when it comes to getting approved for a credit card.

For more information on bad credit, check out our guide to learn how to rebuild your credit.

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