American Homes 4 Rent vs. Essex Property Trust: Which Real Estate Stock Is a Better Buy in 2026?
Written by Robert Izquierdo for The Motley Fool -> American Homes 4 Rent offers exposure to the growing single-family rental market across the Sunbelt and Midwest. Essex Property Trust focuses on supply-constrained multifamily apartment communities in high-demand West Coast mar
American Homes 4 Rent offers exposure to the growing single-family rental market across the Sunbelt and Midwest.
Essex Property Trust focuses on supply-constrained multifamily apartment communities in high-demand West Coast markets.
Which residential real estate stock is the better choice for your portfolio in 2026?
Housing remains a critical need, but should you bet on suburban single-family houses or West Coast apartments? Here is how American Homes 4 Rent (NYSE:AMH) compares to Essex Property Trust (NYSE:ESS) for investors.
These real estate investment trusts (REITs) offer different paths to residential exposure. American Homes 4 Rent focuses on the growing demand for single-family rentals across the Sunbelt and Midwest. Conversely, Essex Property Trust concentrates on supply-constrained apartment markets in California and Washington. Both aim to generate steady income from tenant leases in high-demand regions.
American Homes 4 Rent focuses on the acquisition, development, and management of single-family rental homes. The company manages a portfolio of over 61,000 properties across the Southeast, Midwest, Southwest, and Mountain West regions. It primarily serves families who desire the space of a suburban home but prefer the flexibility of a rental agreement.
In its 2025 fiscal year (FY), the company reported revenue of $1.9 billion, representing growth of approximately 8% compared to the prior year. This top-line expansion helped the business achieve net income of $513.4 million. The company maintained a net margin of roughly 27%, which indicates the percentage of revenue remaining after all operating and non-operating expenses are paid.
As of its December 2025 balance sheet, the debt-to-equity ratio was 0.7x. This metric compares total debt to shareholder equity, where a lower figure generally suggests a more conservative capital structure. The current ratio, measuring the ability to cover short-term debts with current assets, was 62.9x, while free cash flow reached $746.1 million. This cash is what remains after a business pays for its real estate investing activities and capital expenditures.
