Institutional landlords, long dominant in the U.S. rental market, are now facing unexpected competition — not from rival firms, but from a surge of small-scale landlords entering the game.
Fueled by a cooling housing market and the proliferation of property management tech, local investors and first-time landlords are buying up single-family homes and multifamily units once targeted by large real estate investment trusts (REITs).
“What we’re seeing is a reversal of the last decade,” said housing market strategist Alicia Ng. “From 2012 onward, the big players were gobbling up suburban homes. Now, more locals are in a financial position — or are just more aggressive — and snapping up properties.”
The competition is especially fierce in the Sun Belt and Midwest. In cities like Nashville, Indianapolis, and Dallas, smaller buyers have outbid institutional landlords on nearly 30% of deals in 2025, according to RedFin data.
Part of the shift is cultural. Renters, wary of mega-corporate landlords with poor service records, are more likely to stay long-term in properties owned by individuals or family-run companies.
Still, experts say the corporate giants aren’t going anywhere. “They have scale, capital, and long-term strategies,” said Ng. “But they’re now contending with an army of highly motivated, tech-savvy investors who aren’t as predictable.”