👋👋 Good morning real estate watchers! Today, we are going to talk about how mom-and-pop landlords are so dominant in the rental market. They’re basically the squirrels of the real estate world…Small, everywhere, and somehow managing to hoard more than you ever thought possible.

But first, here’s what we’ve been paying attention to this week…

1️⃣ Housing Hiccups: The August 2025 housing market saw active listings drop 1.4% while home prices rose 1.7% year-over-year, marking the biggest price uptick in five months, with sellers retreating due to sluggish buyer demand and high housing costs. Despite mortgage rates falling to their lowest level in a year (6.59%), which has boosted refinancing activity, home sales remain tepid. Redfin expects existing-home sales to remain roughly flat in 2025 compared to the slowest year since 1995. (Redfin)

2️⃣ Apartment Rollercoaster: Despite overall apartment sales volume dropping 8% to $12.5 billion in August, individual property sales increased 11% and institutional investor interest remains remarkably strong, with key players like Security Properties CEO Dan Byrnes noting unprecedented enthusiasm from equity sources. (Multifamily Dive)

3️⃣ Bargain Basement Bricks: Real estate investors are strategically scooping up properties at an average of $455,481 in the latest quarter, notably below the overall market average and representing a substantial 17.5% increase from the same period last year. (Globe St)

4️⃣ PreFabulous: Modular homebuilder Fading West is tackling America’s housing crisis by producing 10-ton homes in just seven days at its Colorado factory, cutting costs by up to 20% compared to traditional construction. (CNBC)

5️⃣ Zillow's Sneaky Squeeze: The FTC is suing Zillow and Redfin over an alleged anticompetitive partnership that effectively reduced consumer rental listing options by creating a de facto monopoly on apartment advertising. The lawsuit claims Zillow paid Redfin to stop competing, transfer advertising contracts, and essentially dismantle Redfin's rental listing business. (Verge)

TOP STORY

While Wall Street buzzes with news about institutional investors taking over the rental market, the unsung heroes of the industry remain the small, independent landlords who own just a handful of properties. According to a recent report by BatchData, a staggering 89.6% of single-family rentals in the United States are controlled by landlords who own between one and five properties (aka mom and pop operators).

So, to all those people renting a home and thinking they’re ‘living the dream,’ congratulations! You’re officially renting from mom and dad…but with fewer family dinners.

Truth is, these small-scale owners are the backbone of the single-family rental (SFR) market, proving that the days of the "accidental landlord" are far from over.

As real estate prices soar and big investors snatch up properties in droves, it's easy to forget about the everyday landlords. But despite the narrative of corporate takeover, these mom-and-pop landlords are here to stay, and their dominance isn't just a statistical blip, it's a foundational pillar of the rental market.

BatchData’s findings show that there are currently 15.7 million single-family rentals, out of a total of 86.5 million single-family homes. Of those 15.7 million rentals, nearly 90% are owned by landlords with just a handful of homes. This is a far cry from the institutional investors like Invitation Homes or Tricon Residential, who tend to dominate the rental market in specific, high-demand regions, such as the Sun Belt.

Yet, the story of small landlords is far from over.

For many, owning a few rental properties is a way to supplement retirement savings or hedge against market volatility. Think of it as a 401(k) with bricks and mortar. Others, however, have become landlords more out of necessity than choice, deciding to hold on to their former starter homes after relocating or moving to a new city.

"People who thought they’d sell their home just ended up renting it out instead,” says Lance Lambert, author of the analysis. “It’s not just accidental landlords; it’s people looking for a little extra stability.”

The Airbnb boom also boosted small landlords' presence in the rental market. Many homeowners turned to short-term rentals to generate extra income, with the idea that a few nights of renting out their place could cover the mortgage. For those who enjoyed a bit of extra cash flow, renting out properties on a longer-term basis became the next logical step.

However, the dominance of mom-and-pop landlords varies by location. In booming Sun Belt cities like Atlanta and Phoenix, the influence of institutional investors is more pronounced. These large players often acquire thousands of homes at a time, purchasing single-family properties in bulk and contributing to the growing trend of corporate ownership in the rental market. As big investors have their eyes set on these high-growth areas, small landlords are facing increasing competition for the same properties.

But despite these challenges, mom-and-pop landlords are still carving out a substantial niche for themselves. Their staying power stems from a few key advantages. First, many are willing to take a more personal approach to property management, offering tenants a level of care and flexibility that larger firms often cannot. “It’s not just a transaction for us. We get to know our tenants, and we want them to feel like they’re coming into a home, not just a house,” one landlord shared.

Even with the rise in interest rates, a substantial number of homeowners still benefit from mortgages with rates under 5%. According to the Federal Housing Finance Agency, 70.4% of U.S. homeowners with a mortgage are enjoying rates below 5%, which has contributed to the high levels of market stability. Many small landlords (especially those who have owned their properties for years) benefit from these favorable rates, making it easier for them to hold on to their rental homes, even in the face of rising competition.

But low turnover rates aren’t just about affordability; they also signal something deeper. In real estate, life events like divorce, death, or job relocation can force homeowners into the rental market, generating demand even during a slow economy. The stability that mom-and-pop landlords offer is a key reason why they continue to thrive.

"Sure, institutional investors have more money and scale, but at the end of the day, the personal touch and local knowledge that small landlords provide are hard to beat," says Lambert.

Despite facing challenges from institutional investors and a volatile housing market, small landlords are poised to remain a dominant force in the rental market for the foreseeable future. Their ability to adapt, innovate, and connect with tenants on a personal level will keep them in the game—whether they’re renting out a few homes in the suburbs or managing a string of vacation properties.

In the end, the single-family rental market may be more complex than it appears. While institutional investors have their part to play, it's the mom-and-pop landlords who still carry the bulk of the weight, proving that even in an era of corporate giants, small players can pack a punch.

Small landlords aren't just holding on; they're quietly shaping the future of residential rentals. It's time to give credit where credit is due.