Welcome to the March edition of the Investor Newsletter. In this issue, we explore the growing "kidfluence" phenomenon and provide important information on Bonus Depreciation. We have a lot to cover to keep you ahead of the SFR curve so let’s dive in!

Kidfluence & the Future of Rentals: How Families Are Driving SFR Demand

Spend some time at a school pick-up line or a neighborhood park, and you’ll see one of the main forces shaping today’s Single-Family Rental (SFR) market… “kidfluence.” It isn’t just about square footage or a shorter commute anymore, the needs of children including school quality, safety, space, and community are quietly guiding where some families choose to live and rent now.

Families remain a core part of SFR tenants, with research showing that roughly 60% of SFR households have children, which is significantly higher than in other rental segments. Additionally, according to the National Association of Realtors’ 2024 housing research, school district quality consistently ranks among the top neighborhood priorities for households with children. Renting a single-family home can be an accessible way for families to secure preferred school districts without the need or possible barriers of homeownership.

Single-family renter preferences are seemingly shifting away from urban apartment living, and more toward space/flexibility and long-term livability, which are features that typically align with family needs. For example, many tenants are now seeking more square footage, outdoor areas, and community-oriented environments. While rent growth may be cooling in some markets, studies show the number of single-family rental households reached a seven-year high in 2025. This is a strong indicator that the demand for SFRs, and their tenant preferences, isn’t going anywhere.

From an investor viewpoint, families remain one of the most stable tenant segments. According to research, nearly 70% of single-family renters have lived in their home for at least three years and approximately 40% have stayed over 5 years. In comparison, fewer than 28% of large multifamily renters remain that long. Longer SFR tenant duration could possibly be driven by children and teens wanting to avoid the disruption in changing schools and neighborhoods. As a result for investors, longer tenancy reduces turnover costs, vacancy risk, and leasing expenses.

As investors, you are not just providing housing. You are providing stability for families. Portfolios aligned with family-friendly locations, school access, and livable home features may be positioned for stronger retention, better cash flow, and long-term resilience in the SFR market. If you have any questions about adding to, or changing your portfolio, please feel free to contact us at any time!

Did You Know: Bonus Depreciation

Everything You Need to Know in 60 Seconds!

• What is it? The IRS requires you to spread out the tax deduction for a residential rental property over 27.5 years, but Bonus Depreciation is an "accelerated" version. Certain shorter-life assets of a rental property (for example: appliances, flooring, fences) may qualify for accelerated depreciation through bonus depreciation.
• Who is it for? Single-family rental owners, investors and developers. 
• Where does it apply? This applies nationwide, because bonus depreciation is a federal tax provision under IRS rules. When it comes to the property, it applies to specific "short-life" components. The main structure of the property (walls, roof) does not qualify, but items identified through a Cost Segregation Study do. Depending on the results, this can include:
  • Inside: Appliances, flooring, window treatments, specialty lighting
  • Outside: Landscaping, driveways, fences
    
• When can you use it? Bonus depreciation applies in the year the property is placed in service for rental. For properties acquired after September 27, 2017 and before January 20, 2025, the bonus depreciation percentage was phased down over time (80% in 2023, 60% in 2024, 40% in 2025, 20% in 2026 and 0% in 2027). However, federal legislation enacted in 2025 reinstated 100% bonus depreciation for qualified property acquired after January 19, 2025, effectively eliminating the phase-down.
• Why should investors care?  By accelerating depreciation into the first year instead of spreading it over decades, investors may significantly increase their current-year tax deductions and improve after-tax cash flow.

It is important to note that if you sell the property the IRS may require you to pay tax on the depreciation you took. As mentioned in a past newsletter, this is called Depreciation Recapture.

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Rate Update:

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Until Next Month!

The Stars and Stripes Homes, Inc. Team