2018 IMN’s Forum's red hot to Single Family Residential Investors

 

Single Family homes as investment property is indeed the latest fad in real estate investments, and for good reason:

  • Houses are the most liquid real estate investment class and the homes that make the best investment property. SFR are also the homes that are the most highly sought after real estate today providing for great liquidity, and of course, the value play that investors are looking for.

  • Single family homes provide all 5 wealth building principles.

  • Homes are in short supply to our growing population.

  • Offers more controls to your real estate investments.

  • Less volatile than today’s fluctuating stock market.

  • Wall street  is actually investing in real estate anyhow so you may already own potions of a houses but paying ongoing Broker fees.

In fact investing is so popular in single family houses that for six years now they have been assembling the best real estate masterminds to share their knowledge and opportunities in an impressive 4 day Single family real estate investment Forum.  In attendance was everyone from fix and flippers, Real Estate Brokers, Turnkey property providers, property managers, REIT fund managers, Note buyers , like-minded investors, TV personalities, as well as many others

My managing partner and I were once again asked to share our insights, where we discussed the nuances of Investing within your IRA as well as Investor Advantage Markets.

 

Here is an important list of the top 7 take-aways from the 2018 SFR forum:

  1. 1 in 9 Single Family Homes are now rental properties.

  2. Single family rentals is the most sought after class of properties chosen by tenants

  3. Increases in rental demand: we are at a 20 year high as it relates to the number of people who chose to rent providing much opportunity for investors and landlords to enter the Property investing business.

  4. Population growth amongst other events has created a shortage of housing and demand is higher than ever before. This is putting a strain on inventory levels, increases on prices and squeezing of the cap rates

  5. Baby boomers, Millennials and now even the affluent have chosen to rent in Lieu of home ownership. In fact affluent people renting is the fastest segment of renters today.

  6. People who own their homes are living in their houses longer (twice as long) as a decade ago  due to lack of inventory, increases to mortgage rates and a number of factors.

  7. Housing demand is off the charts and the U.S. is not keeping  up with demand keeping upward pressure of prices and a need for housing programs

  8. Americans still desire to own a home but are waiting longer to buy and the single family rental offers a great bridge for them to have the feeling of independence offered by a Single family home

My biggest Ahha

Perhaps one of the key take away for me is that home ownership is still believed to be the backbone of a person’s ability to create financial security and wealth. However being an owner occupant is not as important as simply owning real estate. A growing belief is you want to own real estate and rent it out as income source and then life in a place that you rent out. This affords you the ability to own and gain benefits of property ownership and also gives you the flexibility to move quickly if jobs or family demands require you to do so. In fact it is suggested that roughly 50% of investors today currently themselves rent the place they live in.

Housing Shortage and property ownership

Fractional ownership is huge in many other countries. We personally work with a lot of Australians who site fractional ownership as a great vehicle for a larger number of people to afford property ownership.

Most new construction caters to the move up buyer leaving the largest segment of buyer (the affordable homes and entry level homes in dangerously short supply.

A glimmer of light for the tenants

Fortunately as more capital flows into single family rentals, this will start to curb the rapid rent increase and starting offering some ease to affordability. Landlords of course want to keep their eye on this as buying property with tightening cap rates may not organically increase as they have over the past decade so keeping your pulse on this is paramount to your investing success.

Conclusion:

A re-iteration from the who is who in the real estate industry shows a very strong demand for Single family rental housing. Where there is a need their will be entrepreneurs to fulfill that need.  The caps rates are tightening but still numerous deals to be found when being a purposeful investor.

Workforce housing is in the tightest supply creating the greatest opportunity for programs to be implemented and housing needs met.

To see how you too can invest in real Estate give us a call and set up your 15 minute complimentary strategy call. Happy investing.

 

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Karin RosarneComment