Beneath the spreading shade tree in Laura Holcomb’s front yard, there are some 70 varieties of hosta, stands of elephant ear and a Japanese maple. For the 17 years she has owned the brick house on Rose Trail Drive in the Hillshire subdivision, Ms. Holcomb has devoted herself to her home and garden.

Across the street, Carl Osborne and his family have been tenants for two years, moving in after the previous owner lost the house in a foreclosure. They are happy to have a decent place to call home but, like many renters, they have not done much to improve the appearance or join the community.

They are not alone: the family behind Ms. Holcomb, the one two doors down, and several in the cul-de-sac across the way are among the renters who have been supplanting homeowners in this blue-collar, suburban neighborhood as investors buy single-family homes and convert them to rentals.

“Used to, we knew our neighbors,” Ms. Holcomb said. Then she gestured toward the few remaining owner-occupied houses nearby. “Except for the two that have been here, I don’t know any of my neighbors.”

Across the country, a growing number of single-family rentals provide an option for many who lost their homes in the housing crash through foreclosure and for those who cannot obtain a mortgage under today’s tougher credit conditions. But the decline in homeownership is also changing many neighborhoods in profound ways, including reduced home values, lower voter turnout and political influence, less social stability and higher crime.

“When there are fewer homeowners, there is less ‘self-help,’ like park and neighborhood cleanup, neighborhood watch,” said William M. Rohe, a professor at the University of North Carolina at Chapel Hill who has just completed a review of current research on homeownership’s effects.

Even conscientious landlords and tenants invest less in their property than owner-occupants, he said. “Who’s going to paint the outside of a rental house? You’d almost have to be crazy.”

Despite signs of a recovery in the housing market, the country’s homeownership rate is still on the decline. In Memphis, it has fallen from roughly 65 percent of families in 2005 to about 55 percent now, according to the Census Bureau.

In hundreds of neighborhoods that once attracted first-time home buyers, investors have stepped in, buying up tens of thousands of homes for the rental market.

That has helped put paying tenants in a number of homes that were vacant or becoming eyesores. And many of the new tenants say they are eager to buy a home at the first opportunity and share the same concerns as homeowners about maintaining a safe and healthy neighborhood for their families and children.

But it has also raised the ire of some homeowners whose tidy subdivisions have changed, seemingly overnight, into a parade of strangers.

Hillshire was built in the late 1970s, its single-story, three-bedroom homes designed with no particular architectural pedigree, but not ticky-tacky identical. As a young mother of two, Ms. Holcomb, a medical practice administrator, chose the neighborhood because of its school district, paying $73,000 for her home in 1996.

The homeowners interviewed for this article tended to have steady middle-class incomes; several were retired military and police officers. Among the renters, who pay about $900 to $1,000 a month, were several construction and restaurant workers, with lower, less reliable earnings.

On a recent evening, parents pushed strollers and lawn mowers droned, children played on a tire swing and in one driveway, a longtime resident and his grandson tinkered with the fat tire of a slick red drag racer.

But there was a seedy underside. Jimmy Fumich, a homeowner and air-conditioner repairman, said he had been in court that day as a witness in an animal cruelty case against a neighbor, a renter, who had left a dog chained to a stop sign in the heat. She was already in trouble, he said, for breaking into an empty house on the block.

Mr. Fumich, who is Ms. Holcomb’s brother, mentioned a couple of meth houses and one that had been used as a brothel. All were rentals. Police department records show that major crime in the area, which does not include drug offenses, has actually gone down since spiking in 2010.

Still, Lea Ann Braswell, the captain of the neighborhood watch, recounted a recent episode in which a teenage girl, whose throat police said was cut by a young man carrying a sword, sought refuge on Ms. Braswell’s doorstep.

“We used to have hardly anything happen,” she said.

Asked how many renters were active with the neighborhood watch, Mr. Fumich said, “Zero.”

What is watchful to some, however, can feel intrusive to others. In the Osbornes’ home, one resident who keeps a close eye on things is referred to as “Nosy Neighbor.”

Carl Osborne, 26, who parks his boat and the DirecTV van he drives for work out front, rents the house across the street from Ms. Holcomb with his wife, two children and collection of exotic birds. “We just look for somewhere that’s safe for your kids,” he said. “That’s all I’m worried about, my kids and my wife.”

Hillshire does not have a homeowners association to enforce rules about uncut lawns, abandoned cars or rented units. And despite the changes, the neighborhood is largely trim and neat. But in cities like Las Vegas and Atlanta, where homeowners associations are more common, some have struggled with how to handle the influx of renters.

When investors started buying town homes in the small, Atlanta-area community of Austin Park, where units that once sold for over $100,000 now go for as low as $30,000, homeowners did not at first enforce a rental cap because they preferred landlords over vacant units that were no longer paying association dues.

After a summer of loud music, barking dogs, prostitutes and two tenants served with a murder warrant, the board changed its mind, said Joi Aikens, the president of the homeowners association.

Phasing out the rentals will take time, since the association has to wait until a home becomes vacant or is sold.

“You’re caught between ‘I want the dues paid’ and ‘I want a peaceable, nice existence,’ ” Ms. Aikens said.

Investors, however, say they have done a service to neighborhoods plagued by foreclosures, by helping to nudge home values upward and renovating and maintaining formerly vacant homes.

“Where we go in, we go in to fix that house up, and we’re the best-looking house on the street when that goes through,” said Kent Clothier Sr., the senior partner of REI Nation, which buys and renovates homes, sells them to mostly out-of-town investors, then manages the property for them. “That’s good for the neighborhood.”

REI Nation’s tenants stay two years on average, the company said, and about two out of 10 are former homeowners who lost their homes and want to maintain a similar lifestyle while they repair their credit.

Those reluctant renters dislike other renters almost as much as many homeowners do.

In a small cul-de-sac near Hillshire — or what in Memphis is called a “cove” — Rusby Amador cooked dinner for her three sons while waiting for her husband, a tile layer, to get home. One son was hosing off the walkway of their rented home. Two prodigious Boston ferns hung in the entry, and at the curb a colorful ceramic urn sat atop the mailbox.

“When the people buy a house, the people’s more nice,” Ms. Amador said.

“Renters, they don’t care about neighbors. We don’t know who’s going to move in. We worry all the time because we don’t know. I have children.”

Ms. Amador, 33, said the family had bought a new home in 2004 but had not checked the terms of the mortgage carefully, and the payments had grown too high. Now, she said, they are saving to buy again.

Across the street, their neighbor Monica Costict is the last homeowner left on the cove. She, too, is looking to get out of the neighborhood and buy somewhere else. “When we leave,” she said, “we’re going to rent out the house.” 

Wall Street Journal | February 25, 2013 | Nick Timiraos

Renters who opt for single-family homes over apartments are more likely to live in those homes for five years or longer and more interested in ultimately becoming a homeowner, according to a study released Monday.

Some 26% of single-family-home renters said they planned to live in their current rental for five years or more, compared with 22% for renters in multifamily buildings. Three out of every five single-family renters also said they planned to become a homeowner within five years, compared with just 44% of apartment renters.

More than 14 million renters live in single-family homes in the U.S., but over the past year the sector has received much more attention from private-equity funds and other institutional investors looking to build large pools of rental homes by purchasing foreclosures and other distressed properties at fire-sale prices.

While some critics have questioned the ability of these firms to effectively manage hundreds or thousands of single-family homes scattered across a city, the lower turnover of single-family tenants could help reduce costs for landlords.

The survey, conducted by ORC International for Premier Property Management, also found that a majority of apartment and single-family renters indicated that they rent because they enjoy the lifestyle, and not because they’re unable to get a mortgage. Less than one third of renters cited an inability to get a mortgage as the reason they won’t become a homeowner within five years.

Compared with apartment tenants, tenants of single-family homes are twice as likely to have kids. They also tend to have higher median household incomes and value neighborhood amenities such as good schools and parks more than apartment dwellers.

ORC conducted the survey of 1,006 adults between Jan. 10 and Jan. 13.

Realtor.com |  December 11, 2012 | By Diedre Woollard

A new survey shows that active real estate investors are still ready to buy up plenty of properties. A joint BiggerPockets.com/REI Nation survey conducted by ORC International for BiggerPockets.com shows that despite rising prices and shrinking foreclosure inventories, 65 percent of active real estate investors plan to buy as many or more residential properties in the next 12 months as they did in the past year. A total of 39 percent of active investors intend to increase their purchases over the next twelve months while 26 percent plan to buy as many in the year to come as they did in the past year. This group represents an overall pool of 4.5 million investors. Only 30 percent said they plan to buy fewer properties than they have in the past. Last year investors purchased 1.23 million homes, a 64.5 percent increase over 749,000 in 2010, according to the National Association of Realtors.

Investors Contribute To Local Economies

Some 3 percent of American adults, or 7 million people, consider themselves to be real estate investors and an additional 9 percent of all Americans own investment property today but have no current plans to buy more. Investors are a huge part of the economy, spending $9.2 billion a year to repair housing with a media expenditure of $7500 per property. The survey found that real estate investors are spending more than four times as much as the federal Neighborhood Stabilization Program to repair and rehabilitate the nation’s housing stock. Twenty percent will spend $10,000 to $30,000 on their next property and 16 percent plan to spend more than $30,000. “This survey puts some hard numbers behind the contribution that investors are making towards not only improving neighborhoods and fighting blight, but also towards driving the economy. Those dollars provide jobs and put money into local economies with local companies,” said Chris Clothier, a partner with REI Nation.