Considers the experiences of institutional investors in the United States, who direct approximately a quarter of their property portfolios towards the residential sector and whether it offers any lessons for the development of the sector in the UK. The residential sector plays an important portfolio role in the US: the benefits are seen in the potential achievable returns, the sector's risk profile, the ability to match income related liabilities and the portfolio diversification role. The US experience shows tax efficient vehicles, such as Real Estate Investment Trusts (REITs), are essential for market development, but are not a pre-requisite; although a suitable structure offering liquidity, investment grade product and management efficiencies is needed. The UK has seen improvements in the quality and efficiency of residential management but there is opportunity for more innovative solutions. Information and research on the residential investment market will develop as the sector matures; this will be essential to inform investment decisions and establish the sector's credibility in the institutional community. Report based on findings of a research project, funded by Jones Lang LaSalle Educational Trust. Taken from journal abstract. Graphs, tables, references.