Small Investors Own Most US Rental Properties, Survey Shows

Individual investors own most of America's rental properties, according to new federal data. The 2024 Rental Housing Finance Survey, sponsored by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, estimates these investors control approximately 59% of the nation's rental properties, representing about 32% of its rental units.

While institutional investors often dominate headlines, the data shows a more nuanced picture of rental housing ownership. Large entities like LLPs, LPs, and LLCs own a smaller share of properties but control a larger portion of units.

Ownership Breakdown

The survey provides a clear comparison of how different ownership types control properties versus units.

This structure means the daily decisions of Main Street investors-whether to buy, renovate, refinance, or sell-collectively shape housing quality, neighborhood stability, and rental supply. The ability of these investors to keep investing, however, depends on access to capital and sound financial planning.

Challenges for Reinvestment

Preserving America's existing housing stock relies partly on continued reinvestment, which faces significant headwinds. Raise interest rates increase borrowing costs, while insurance premiums have risen sharply in many markets. Lending standards remain tight. Also, property taxes have continued to rise in many jurisdictions. Property tax, which varies by county, city, and school district, is typically calculated annually on the assessed property value to fund local government services like schools and police.

Handling this market requires more than capital alone. Investors increasingly need integrated expertise in financing, insurance, tax planning, and legal guidance to evaluate opportunities. Without that support, investors may postpone acquisitions, defer improvements, or exit the market entirely.

Strategies for Deploying Equity

The discussion around real estate investment often focuses on access to capital, but access to effective capital strategies is equally key. Many investors hold substantial equity in appreciated properties. Repositioning those assets without immediately recognizing a taxable gain can be challenging. Strategies like Section 1031 exchanges, when properly structured, may allow an investor to defer gain by exchanging qualifying investment property for like-kind property. A deferred exchange can help preserve more equity for reinvestment into properties that better fit an investor's objectives.

Impact on Housing Quality

Federal data indicates that approximately 79% of rental properties had capital-improvement expenditures in 2023. Owners spent a median of $900 per rental unit on these improvements. Investments like these improve housing quality and extend the useful life of existing homes, helping preserve rental inventory. Making such investments requires both access to capital and appropriate financial tools. When property owners can redeploy equity, secure financing, manage risk through insurance, and handle complex tax rules, they are better positioned to reinvest. When these tools are hard to access, owners may delay needed repairs or scale back renovations. Over time, deferred maintenance reduces housing quality and further constrains the supply of quality rental housing.

Real estate decisions rarely exist in isolation. Financing affects insurance requirements and cash flow, while tax strategy influences when and how an investor buys, sells, or exchanges property. Viewing these pieces as part of an integrated strategy helps investors manage risk and make more informed long-term decisions. As Julie Baird, President of First American Exchange Company, notes in the source article, the benefits of supporting these investors extend beyond individual portfolios. Their investments can support neighborhood stability and contribute to a resilient rental market over the long term.