But if it takes off, it could prove a "key development in the industry's life cycle" according to the analysts, as it frees up money for investors to grow faster and gives them a cheaper cost of capital.
The best way to play the opportunity in the single-family rental space is to buy single family REITs, according to the analysts. American Residential Properties (ARPI) is their top pick.
Since investors spend considerable money refurbishing homes, Home Depot (HD) and Lowe's (LOW) stand to benefit. The analysts prefer Lowe's given "higher relative margin upside, stronger return of capital and more attractive valuation."
Buying U.S. banks with exposure to cities where buy-to-rent investors are active would be another way to play the opportunity. The analysts recommend Bank of America (BAC), SunTrust (STI) and TCB (TCB)-- Written by Shanthi Bharatwaj in New York. >Contact by Email. Follow @shavenk
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