RIVERVIEW — Flip-flops sit jumbled at the doorstep. Clothes lay scattered across the living room couch. A family portrait from Lewis and Lynn Mayos' vow renewal ceremony hangs proudly over the stairs.
But the first of each month brings a reminder they only rent the house they've made their home. The problem is their landlord. The subsidiary of private-equity giant Blackstone Group surprised them recently by raising their rent $50, to $1,450 a month, and it has rejected their pleas to tame the jungle of weeds in their back yard.
The family's home is one of 13 on their suburban block gobbled up in recent months by big investors, part of a Wall Street-led, multibillion-dollar grab at America's growing market of renters. And though the Mayos like their house, they did not anticipate how aggressive their landlord, Invitation Homes, would be in pressing for more cash.
"They were wanting more (in rent), but (they) knew if they asked for more, we'd walk," said Lewis Mayo, 45, a CentCom employee stationed at the MacDill Air Force Base. "They said if you were renting from a person, (the landlord) probably wouldn't risk it. But they have to run this like a company. And with a company, it's all about profit."
Seven of the largest investors buying homes here have in two years spent more than $1 billion, amassing 6,800 houses in an unprecedented land grab, a Tampa Bay Times analysis has found.
Now, for investors, comes the hard part. They must fix up, rent out and maintain thousands of widespread homes, all the while pulling in tenants and convincing their financial backers this untested business is worth the risk.
"Mom-and-pops (landlords) often care more about there just being a warm body in the property, not about getting every last dollar they can," said Peter Murphy, president of Home Encounter, a Tampa property management firm. "But investors are really pushing the envelope. They're finding you can raise rent 3 percent, 5 percent, and folks don't want to leave. And they're doing that because they've got to show Wall Street the properties are producing the returns they expected."
Managing the homes is a more delicate ballet than investors' shock-and-awe spending spree. Yet it is vastly more important, because their success depends on squeezing out growing returns.
If their operations run into trouble, Federal Reserve analysts warned in December, it's not just investors who will pay the price. Management failures could force a massive sell-off that could sink property values, lead to widespread home vacancies and "raise financial stability risks" for investors and homeowners alike.
"You have a guy in a huge tower in New York buying homes in Tampa, but they don't understand the local market," said David Guarino, a senior research analyst with John Burns Real Estate Consulting. "They got in thinking it'd be easy, and they'd make a lot of money … but they're starting to understand it's not as easy as they thought."
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Between 2007 and 2013, the country added 200,000 homeowners and 30 times that many renters, census data show. And about 40 percent of American renters choose single-family homes over large apartments, National Multifamily Housing Council data show.
So to capitalize on what analysts call a swelling "rentership society," deep-pocketed investors began parachuting into the parts of the country hardest hit by the housing bust. That includes Tampa Bay, where the homeownership rate plunged last year to its lowest point in nearly 30 years.
Seven of the biggest investors here — Blackstone's Invitation Homes, Colony American Homes, American Homes 4 Rent, Silver Bay Realty Trust, Pretium Partners (once called Fundamental REO), Beazer Pre-Owned Rental Homes and Waypoint Homes — were ravenous, buying all in cash. The nation's largest home landlord, Invitation Homes, has spent $400 million locally, a Times analysis found, and owns 44,000 homes nationwide.
Investors landed here at a time when the average household's spending on rent is near its highest point in the last three decades, Zillow data show. Tenants here pay 32 percent of their income toward rent and utilities, compared to 27 percent in 2004.
But even at that baseline, market watchers said, investors have set rents surprisingly high. The median Colony American Homes rental in Tampa Bay, online listings show, costs about $1,600 a month, 33 percent higher than this area's median house rent. The priciest is $3,695 a month.
Colony declined to comment for this story. Invitation Homes spokesman Andrew Gallina defended its national rates as 30 percent cheaper than apartments on a square-foot basis.
Murphy of Home Encounter said investors showed "some big gaps between projection and reality" on what renters here could afford. Holding that hard line has crimped the number of homes investors have been able to rent.
"They've been very non-negotiable," said Jack McCabe, a Deerfield Beach housing consultant. "They'd rather let a home sit empty than taking a lesser amount of rent."
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At the start, some investors went on a leasing spree, renting to "anybody who was able to gather a security deposit," analyst Guarino said. But the plan backfired, with many renters falling behind on their payments. Between October and January, the payments from a highly watched set of Invitation Homes rents fell 7 percent, data from investment research firm Morningstar show.
Investors have counted on raising rent for installed tenants to help boost revenue.
"It costs them to move, and by the time they get a truck and put a deposit down on a home, it's disruptive to the family," said David Zanaty, division vice president for Waypoint Homes' eastern portfolio. "They're biased, unless they've had a big life event, in that they tend to want to stay."
That's how Lewis and Lynn Mayo felt when confronted in January with a climbing rent. Saving money would be nice, they thought, but leaving their four-bedroom would be daunting, especially for their three girls.
"They've got friends in the neighborhood. They know the way to school," Lewis Mayo said. "It'd be a big hassle to leave."
Rent increases are not uncommon in apartments, and investors said theirs have yet to turn many renters away. "We're exceeding our renewal goals, so we must be doing a pretty good job," said Gallina, the Invitation Homes spokesman.
But some investors have forcefully pushed "to get as much rental income from these homes with as little expenditure as possible," said McCabe, the housing consultant. "Some thought they could raise their rents 10 percent a year, and that just isn't going to happen. People just can't afford that … when their income is flat or declining, which is what we have in Florida right now."
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Investors said maximizing rents while keeping tenants happy is a tough balancing act, especially considering there is no large-scale home-rental precedent for the market to match.
"We want to do right by our residents, but we also want to make sure we're … getting the best return available," said Zanaty of Waypoint Homes.
Unlike mom-and-pops, who often opt to work with tenants and avoid court disputes, investors have aggressively moved to sweep out tenants late on rent, property managers said. Big investors here have filed more than 130 eviction cases since last year, county records show.
Even with paying renters, big buyers of foreclosed homes have still been surprised by expensive repairs, including for rotten wood, ripped-out copper wires, spotty plumbing or crumbling roofs. Squatters and foreclosed homeowners have used other homes as toilets or punching bags.
Investors have faced increasing property taxes and fines from homeowners' associations for dirty mailboxes or bad parking jobs. Then there are random acts of nature: One Brandon home Invitation Homes bought for $180,000 was condemned less than a year later after a falling tree smashed through the roof.
Zanaty said investors knew creating an industry from scratch would be a challenge. "You don't get in a boxing ring and not expect to get popped in the jaw once or twice," he said.
But even the smallest decisions have frustrated investors' most crucial class of early renters. Lewis Mayo, the Riverview tenant, said Invitation Homes was diligent about sodding his front lawn, but the back yard, where "curb appeal" is seen as less important, remains overgrown with straggly weeds.
Gallina, the Invitation Homes spokesman, waved off the worry, saying, "In building this new industry, it really is about making sure we do a good job of managing residents' expectations when they come in."
He added, "From a personal standpoint, my back yard doesn't look as nice as my front yard either."
Drew Harwell can be reached at (727) 893-8252 or firstname.lastname@example.org.