A stall in home price gains and a large drop in the number of distressed properties have some big investors pulling out of the single-family rental market.
Home prices are up over 12% from a year ago, according to CoreLogic, but still down 18% from their peak in 2006. Investors certainly played a role in putting a floor on home prices and then pushing them higher than many predicted. It may be tiny slice of the housing stock but investors who remain in the game say it will get larger and the potential for a long-term profit is big. 
Now, faced with higher mortgage rates and weak wage and employment growth, even usually bullish brokers predict home prices will stay flat through 2014.
Many critics say without rising prices, the rental trade is a low-to-mid single-digit return proposition. Management of the homes can be as tricky as it is costly, and that alone lowers profit.
However, many large institutions such as Blackstone, who owns 32K homes in 12 states, is still buying. American Residential, a publicly traded real estate trust, has already bought 80 portfolios of rental homes from smaller concerns, according to Hawkes, who said that the company is now setting its sights on Georgia, the Carolinas, Indianapolis and Chicago.
Single family rentals have always been a large component of the housing market. The only difference now is that mom and pop landlords are being replaced by large-scale investors and management companies. What we’ve sought to do is to say, ‘Could we convert this business into something that looks, acts and smells like multifamily,” said Hawkes.
Read more Rental Market with FlatFeeNews:Investors in rental homes: ‘It’s a business not a trade’
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Source: CNBC 10/3/2013
