The nation’s largest investor in rental homes is backing a new rent-to-own home company.
Dallas-based Invitation Homes has acquired more than 80,000 rental homes across the country over the past decade. Now, the big real estate owner says he’s making a $250 million investment in a new venture. Pathway Homes, which has just launched, offers potential buyers a plan to find a property and rent it out with an option to buy.
“Our investment in Pathway is part of our vision to provide opportunity and choice in the global housing market,” Dallas Tanner, president and CEO of Invitation Homes, said in a statement. “Ten years ago, we saw an opportunity to revolutionize the home rental industry, and now more than ever, we believe the single-family rental model is an advantage for the growing share of Americans who choose not to not buy a house.
“With this innovative solution, we are once again expanding the housing choices available and opening the door to home ownership for millions of people.”
Partnering with Invitation Homes in new venture Pathway Homes, global real estate investor and operator Regis Group and venture capital firm Fifth Wall. The partners are committing $750 million to the new program.
“With the launch of Pathway Homes, we are focused on helping underserved populations who have a stable income but are still struggling to qualify for a conventional mortgage due to increased down payments or high requirements. when it comes to credit rating,” KC Cleary, co-founder of Pathway Homes, said in a statement. “We offer unique programs designed to meet people’s needs based on their financial situation and ownership schedule.”
Pathway Homes plans to help its customers identify a home, then purchase it on their behalf and rent it to them with an option to buy.
“Pathway Homes prices rents and options to buy homes with fixed, below-market annual increases, typically over a five-year term,” according to the company.
Invitation Homes will provide property management services for the new venture.
Pathway Homes is starting 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 prices at record highs in the United States, rental homes are an increasingly popular option for residents who are no longer priced at home or who don’t want to own a property.
And investors have acquired thousands of D-FW homes.
Attom Data Solutions estimates that more than 13% of North Texas homes last year were purchased by institutional investors. And investors nationwide accounted for nearly 7% of transactions, or one in 14 sales of single-family homes and condos in the United States in 2021.