Single-family Homes Are NOT a Good Long-Term Investment ?

[Paul C.]

I just came across a story on Bloomberg about Home Partners of America Inc. (formerly Hyperiod Homes Inc.) -- they buy single-family homes and rent them out, but give tenants the option to eventually buy the homes.  In the story, the founder of the firm, Lew Ranieri says:

Single-family homes aren’t a good long-term investment for landlords because upkeep expenses and renovations for new tenants cut into profits, Ranieri said last year.

"Because a house was never built to be rented, the wear and tear on the house makes it prohibitive to keep renting over a period of time because the cost of the rehab becomes overwhelming,” the mortgage-bond pioneer said in an October 2013 interview. “There’s no historic evidence of long-term single-family rental.”

Long-time single-family home landlords, what do you say to that?  Please give us some context like how long you've been a landlord and any other details you're comfortable sharing (geographic area, number of properties, price point, etc.).  What has your experience been?

Here's a link to the full story:

http://www.bloomberg.com/news/2014-11-06/blackrock-kkr-take-majority-stake-in-ranieri-rental-firm.html