The country’s largest investor in rental houses is backing a new company to lease-to-own homes.
Dallas-based Invitation Homes has acquired more than 80,000 rental houses across the country during the last decade. Now the big property landlord says it’s making a $250 million investment in a new company. The just-launched Pathway Homes provides potential buyers a plan to find a property and rent it with an option to buy.
“Our investment in Pathway is part of our vision to provide opportunity and choice in the overall housing market,” Dallas Tanner, Invitation Homes president and CEO, said in a statement. “We saw an opportunity a decade ago to revolutionize the home rental industry, and, now more than ever, believe that the single-family rental model is an advantage for the growing share of Americans who are opting not to buy a house.
“With this innovative solution, we once again expand available housing choices and open the door to homeownership for millions of people.”
Partnering with Invitation Homes in the new Pathway Homes venture are global real estate investor and operator Regis Group and venture capital firm Fifth Wall. The partners are pledging $750 million to the new program.
“With the launch of Pathway Homes, we are focused on helping underserved populations who have a steady income but still struggle to qualify for a conventional mortgage because of rising down payments or high credit score requirements,” K.C. Cleary, Pathway Homes co-founder, said in a statement. “We offer unique programs designed to meet peoples’ needs depending on their financial situation and ownership timeline.”
Pathway Homes plans to help its customers identify a house, then it will purchase it on their behalf and rent it to them with an option to buy.
“Pathway Homes establishes rent and home purchase option prices with fixed, below-market annual increases, typically over a five-year term,” according to the firm.
Invitation Homes will provide property management services for the new venture.
Pathway Homes is starting up with properties in the Atlanta and Phoenix areas and plans to expand to markets in Florida, North Carolina, Texas, California, Washington, Colorado and Nevada.
With home costs across the U.S. at record levels, rental houses are an increasingly popular option for residents who have been priced out of ownership or do not want to acquire a property.
And investors have acquired thousands of D-FW houses.
Attom Data Solutions estimates that more than 13% of North Texas homes last year were purchased by institutional investors. And investors nationwide accounted for almost 7% of transactions, or one out of or every 14 U.S. single-family home and condo sales in 2021.
