Whether you’re talking to a seasoned real estate investor client or someone who is considering single family residential real estate as an investment, here are a couple of recent articles you can share to help them see the potential in the current real estate market.
According to CoreLogic, we’re seeing the highest percentage of homes purchased for investment since 1999, last year rising to 11.3%. The increase came from smaller investors, not so much the larger sized or institutional investors. Also known as “mom and pop” investors, those who purchased 10 homes or less, grew from 48% in 2013 to 60% in 2018, of all investor purchased homes.
Starter homes are the most popular type of home being purchased by investors, now accounting for 1 in 5 (20.3%) of residential properties over the past two years. Not only is the home type a factor but the market location is significantly influencing investors. CoreLogic notes that investor activity is generally lowest in the Western states and highest East of the Mississippi River. Markets with higher rents compared to purchase prices are a target for smaller investors.
As another sign that rental homes are hot and in demand, check out the buzz in the builder circle in this article. A recent housing trend, “build-to-rent,” is gaining traction as a source of income for institutional investors. Some investment groups are partnering with builders to build and rent new single family homes, because of higher rent growth and lower turnover than multifamily apartments.