Notes from the Single Family Rental Investment Forum
Wow! What an action packed week. I just returned from the Single Family Rental Investors Forum. Investors from all over the country and the Who’s Who in the investment arena were in attendance. I had the privilege of moderating at this event and met many great industry providers as well as many talented investors. By talented investors I mean some very serious players, Investors who started small just like most investors and found their niche in investing and went on to acquire a large portfolio of single family properties. Many had 10, 20, 50 or a hundred properties.
I was surprised at how many had more than 200 properties and yet I met people and fund managers who had several hundred and even over 1,000 homes in their growing portfolio.
Some key takeaways:
- 54% of Americans believe leasing a single family home is a wise choice.
- 1/3 of Millennials like to "try before they buy" which means they rent a house before they buy.
- Another 1/3 of millennials simply believe renting a house is their preferred choice.
- The average renter of a house consists of 2 adults and a dog (yes when people rent a home they want to have a pet) so allowing pets may be a great consideration. Pet fees are used to provide security to landlords as a nonrefundable fee. Some even charge monthly pet rent of 5 to 10 extra for the pet.
- Tenants who later go on to buy a house are wanting to save for a larger down payment which places them in a rental house for a longer period of time.
- Most of the growth in ownership rates for houses will be to the Asian and Hispanic communities.
- Single family homes that are used as rental homes are on the rise. Currently there are more than 1,706 million single family homes being rented and there does not appear to be a slow down in the desire for the desire of these houses.
- 70 thousand investors own more than 10 houses in their portfolio.
>> Those who have too aggressive of a ROI goal tend to never buy any houses
I could add hundreds of bullet points here, but the key take away is that the single family house rental business is a growing and thriving business that is here to stay.
More and more people are finding renting a house to be a great choice for them. Millennials like to try before they buy, if they buy at all and Baby Boomers are finally getting their adult children out of their homes. More and more of these baby boomers now prefer to rent a house so they do not have to be bothered with household maintenance.
People who rent today prefer to rent single family houses as they like the independence a house has to offer and not being tied to a mortgage is comforting to them.
About half of all real estate investors are new to the field of investing and with a growing demand for rentals, the investor base is growing. Even the Wall Street investors who bought thousands of houses with a plan to fix hold till the market corrects itself and then sell are finding reasons to stay put in the landlord industry as it has proven to be a very lucrative investment model.
The long term business for single family home investing is posed to be very strong.
PS - If you are considering investing in real estate rental housing, make sure to sign up for our Real Estate Investing Dashboard Report.