DHI · Earnings call · 2026Q3T · Full report

Rental Sales Model

HORTON D R INC /DE/ · 2026-10-29 · Importance 34 · Surprise 42 · In source text

Management described the rental business as merchant-building communities, leasing them up, and then selling the completed projects to investment buyers. It said higher interest rates reduced expected values for some completed projects and dampened expected margins for forward sales, particularly in multifamily. For single-family rental, the company has moved to a forward-sale model with an investor identified before construction begins.

Key facts

• D.R. Horton expects returns on the single-family rental side to improve over time after switching to a full forward-sale model with an investor in place before project start.
• D.R. Horton expects its rental inventory balance to remain at or below its current level during fiscal 2027.
• D.R. Horton's rental property inventory at September 30 was $2.6 billion, down 3% year over year, consisting of $291 million in single-family rental properties and $2.3 billion in multifamily rental properties.
• D.R. Horton’s rental model is to merchant-build communities, lease them up, and then sell the projects to the investment community.
• D.R. Horton's rental operations generated $647 million of fourth-quarter revenue from selling 509 single-family rental homes and 2,180 multifamily rental units.
• D.R. Horton's rental operations earned fiscal 2026 pretax income of $18.2 million, or $110 million excluding impairment charges, on $1.2 billion of revenue from sales of 2,073 single-family rental homes and 2,740 multifamily rental units.

Impact estimates