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.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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