US home-rental industry is reshaping itself

[NEW YORK] Alexander Philips joined the rush to buy foreclosed US homes four years ago, spending US$40 million on houses in California and Nevada to operate as rentals. Now his firm, Twinrock Partners LLC, is getting ready to sell.

"We didn't want to be the last one standing when the music stopped," said Mr Philips. "We view this as a trade, not as a business."

The US home-rental industry, transformed over the past two years by Wall Street-backed companies that were built on the rubble of the housing crash, is poised to be reshaped again as landlords like Mr Philips get out. Corporate owners with limited capital or deadlines to repay investors are now selling houses in bulk, or one by one, after a 26 per cent surge in prices from a March 2012 low. For bigger firms, swallowing smaller competitors is among the best opportunities for growth as they shift their focus to managing scattered properties.