ARK Homes For Rent
ARK Homes For Rent has Laser Focus on Resident Experience
By Carole VanSickle Ellis
When ARK Homes For Rent founder Jordan Kavana founded the data-driven single-family-residential management company that would eventually evolve into ARK Homes, the idea of SFR as an industry was barely a blip on the industry radar. That company, which prided itself on handling the entire spectrum of property management from research and acquisition to renovations, renting, and resale all in-house, worked with strategic partners to complete more than $5 billion in real estate transactions in the southeastern United States before establishing ARK Homes in 2021.
Kavana, who now serves as chairman of the company, continues to guide corporate focus toward the SFR residential experience, debuting innovative products and health and wellness strategies to complement and optimize ARK’s fully integrated management and investment strategy.
“Because we are a fully integrated property ownership and management company, we have full control over ARK Homes For Rent’s growth, its resident experiences, and operations,” said CEO John Isakson. “ARK Homes prides itself on being as focused on the residential experience as on the real estate.”
“The SFR industry is a small, intimate vertical,” observed COO Miles Adams. “Our willingness to embrace technology, innovation, and continuous improvements makes ARK Homes stand out. We are really proud of our work, especially from a people perspective.”
New Homes Net Optimal Results
Isakson explained that one of the most important ways ARK Homes For Rent demonstrates commitment to resident experience is the company’s determination to acquire only new construction homes. This keeps repairs and maintenance to a minimum in most cases, he said, as well as helping both ARK Homes and residents avoid the inconvenience and expense associated with the major capital expenditures that often accompany renovation and maintenance (R&M) in older properties.
“If you look at our competitors in this space who do acquire older homes, you can see their R&M and CapEx rates are much higher,” Isakson concluded.
“Our strategy is unique and so successful partly because we only buy new homes,” Adams chimed in. “This makes our product particularly attractive in the southeast and in Texas.” The Southeast remains a hot spot for new and relatively affordable new construction, permitting more residents access to this type of rental property even if personal preference, interest rates, or general affordability issues prevent them from owning the home.
“The rental rates on a new-construction home acquired by ARK Homes For Rent are also typically significantly less than what it would cost a resident to own the same home in the same location,” Isakson noted, citing a recent article in the Wall Street Journal in which two ARK Homes residents described their decision-making process around opting to rent in the Atlanta, Georgia, area instead of buying a home.
“They preferred to have that $400 or $500 in their pockets each month rather than own the home,” he continued. “In our resident base, we are seeing a big move away from homeownership and the financial strain that can be associated with it.”
In that WSJ article, satisfied ARK Homes resident Alicia Couch described the decision this way: “It is not that we cannot afford to buy; it is that we don’t want to and we don’t feel like it’s worth it.” She said they planned to buy new furniture and repaint their daughter’s bedroom, taken three vacations in the last 12 months, and added to their savings as a result of renting from ARK instead of buying a home. She also noted the benefits of not having to deal with landscaping issues, such as mowing the lawn.
“It is all about making sure we have the right properties and we are communicating with residents in the right ways to enrich their lives,” Adams said. “We are constantly expanding and evolving solutions throughout our company.”
Prioritizing Health & Wellness in Residents and Residences
Another element that makes ARK Homes stand out among other SFR providers is its ARK Homes For Rent app featuring its ARK Living platform, a proprietary software received by every resident upon acceptance of their application. The app features many typical features associated with SFR residential apps, including access to repair and maintenance professionals, pest control, and rent payments. However, ARK Living also contains a popular wellness element Isakson credits as the reason for ARK’s high level of resident engagement. “It is one of the most robust programs in the industry,” he said proudly.
The ARK Living app was designed not just to fulfill logistical requirements for residents and management teams, but also to create community and promote wellness, Adams explained.
“We do not want to offer just the commodity of a roof and four walls. We want to make sure our residents have access to custom content that will help them with the things they are interested in from a personal perspective, be it better sleep, exercise, meditation, or other elements of their resident experience.”
Isakson called the acceptance rate for the app since its debut earlier this year “tremendous,” and he credited founder Jordan Kavana with the idea for the program.
“The idea is that the app answers the question, ‘How can we do good, create value, and also help retain our residents?’” Isakson said, noting the ARK Homes For Rent resident tends be getting married or is already married, has children or is planning on having children in the near future, thinking hard about school systems, and “simply does not want to move all the time.”
He concluded, “It cannot be ‘just about the rent check;’ it has to be about community and a sense of wellbeing. When we achieve that, we provide people a place to live that truly feels like home.”
Creating the Best Opportunities in the “Forever Renter” Trend
In 2022, ApartmentList.com reported that the percentage of Millennial renters who were planning to “rent forever” had hit an all-time high of 18%, up from 11% just four years (and a global pandemic) prior. At that time, Forbes contributor Michael Lucarelli predicted, “Forever renting could lead to a massive shift in the housing market” and “It is very possible that the earning potential for real estate investors will only increase year-over-year.”
At the same time, U.S. Census Bureau data indicated the median age of homebuyers had risen 14 years to 45 (vs. 31 in 1981), and CDC data showed the average age of first-time mothers in 2022 was more than 27 years, compared to just under 25 years in 2000. (In 1972, that number was 21 years of age.) While an increase of roughly two years may not seem like a lot, this slight uptick combined with rising home prices and interest rates along with the mental shift indicated by nearly one in five young adults stating outright they are likely to rent forever bears out Lucarelli’s prediction that the housing market is changing when it comes to how we rent, buy, invest in, and view residential properties.
The “Forever Renter” is likely here to stay, and that means service providers like ARK Homes For Rent are positioned to provide cutting edge, new services to a new population who has very different ideas about what makes a house a home than any generation prior.
“For a lot of adults, the idea of homeownership is more of an albatross than an asset,” said Isakson. “As access to broader investments has increased, there is not the same mentality around homeownership, and it is not thought of as the same kind of ‘piggy bank’ today the way previous generations viewed it.” Isakson noted forever renters tend to value mobility and flexibility over permanence, but they also want a sense of community that has not always been integral to larger SFR developments.
Aging in Place
According to a Wall Street Journal article published in December 2023, a crucial part of creating that feeling of community and “home” is contained in the option to modify a residence. “More rentals are advertising themselves as kid- and pet-friendly and permitting renters to make extensive modifications to their spaces,” wrote reporters Rachel Wolfe and Veronica Dagher. They also reported many residents earn more than a quarter of million dollars (up 400% since 2010), and these residents are willing to pay for living options that permit modifications to fixtures and décor just as any owner-occupied house would. Renting also permits many residents to live in highly desirable locations, such as Manhattan.
One resident of a Manhattan loft reported he spent more than $40,000 on upgrades to his rental property and was even featured in Architectural Digest, but never could dream of actually owning the property where he lives. “What could I possibly get in Manhattan putting $40,000 down? Nothing,” he said. “Now, I’m in my dream apartment.”
Sometimes, forever renters find that their dream home is one in which they can age in place and that feels much like the home in which they raised their own children. In April of this year, Don Walker, managing principal with John Burns Research & Consulting, told Multi-Housing News there is rising interest from 55-plus residents and builders in build-to-rent, 55+ communities.
“There are compelling reasons for that to happen, including demographic trends, growing need for accessible housing, and the desirability of this market,” he said. Given that more than 90% of adults say they wish to age in place, defined as avoiding nursing and assisted living facilities vs. staying in their current residence, ARK Homes has shown itself ahead of the curve by creating BTR options that are accessible for older homeowners or that may be easily updated to permit accessibility.
Kavana observed that more and more residents are opting for longer lease terms and renewing with higher frequency in his developments. In fact, he said, “Nearly 70% of our tenants renew after their one-year lease expires. [That is] a much higher rate than the average industry apartment renewal of under 60%.” He told WSJ, “We thought this was going to be a transition to owning, but in fact…it has become a lifestyle choice.”
“People up and down the income scale, relatively speaking today, would rather rent than own vs. previous generations,” Isakson chimed in. “At ARK Homes, we are providing a service because that is where the market has moved.”
We Always Want to be Number One
One way that ARK Homes For Rent is catering to this new renting demographic is by providing access to homes in which residents will be happy to remain for years to come. The company only buys new homes to add to its inventory, often acquiring substantial portions of new-construction developments at the outset or conclusion of the retail sales period and also building entirely new build-to-rent subdivisions of its own, complete with swimming pools, tennis courts, or playgrounds. “We acquire detached homes and townhomes, depending on what is available,” Isakson said. “We offer both BTR communities and scattered-site options, depending on what the resident wants.”
“Our team at ARK Homes has experience in real estate, enjoys adapting to new things, and continuously embraces improvement,” said Miles Adams. “We have a desire to be the best within the industry with our offerings, from the product itself (the home) to the human touch. We always want to be number one.”
Learn more about ARK Homes at ARKHomesforrent.com.
SIDEBAR
By the Numbers
7 // Number of states in which ARK Homes residences are available (Texas, Florida, Georgia, Alabama, South Carolina, North Carolina, and Tennessee)
12 // Number of BTR Communities currently owned by ARK Homes For Rent
97 // Occupancy rates in BTR subdivisions nationwide (Yardi Matrix)
95 // Occupancy rates in subdivisions with both owner-occupied and SFR properties (Yardi Matrix)
7.3 million // Number of rental properties available for $2,000 or more a month in 2022 (vs. 3.2 million in 2012)
