Residential real estate investing is growing and becoming a lucrative business for many people, especially in the single-family home investing area as everyone from the small investor to the large investor can find ways to fit their business models into this space.
By Larry Arth
Recently I was honored to be a moderator on a panel at a three-day event on single-family home investing attended by the Who’s Who of real estate investing.
In fact I had the privilege of meeting some of you readers there.
Attendees were everyone from small mom and pop investors, to large investors owning hundreds of properties to institutional investors who hold thousands of units in their portfolios.
Why would so many real estate investors gather to discuss single-family home investing?
Single-family home investing is a lucrative, growing business.
For many reasons people are choosing to rent instead of buy homes, and most prefer single-family homes. Investing in single-family homes is here for the long term. So at the conference, it was time to unite and share the do’s and don’ts needed to make single-family investing a successful business.
12 single-family home investing trends from the investor’s forum
©Photo by Maridav via Canva
- Everyone from millennials, (who like to try before they buy, to baby boomers, who no longer want to be tied to the task of maintaining a home, are finding comfort in renting. These investor classes, as well as growing populations, have created a strong niche for investors and landlords.
- It has been found that 54% of Americans believe leasing a home can be a wise choice.
- Millennials deserve attention from investors because they are such a huge group. They like to try before they buy. So they rent first. At least one third of millennials have no desire to buy and plan to continue to rent long term.
- Single-family homes are the preferred choice for those who rent.
- An average renter today consists of two adults, 1.5 children and a pet. So single-family homes fit this bill best. Landlords are better served when they allow pets. They can protect their property with pet fees and pet deposits.
- Those tenants who do plan to someday buy a house remain tenants for a longer period of time as they choose to save for a larger down payment.
- Asians and Hispanics also are given much attention. The real estate and lending industry has discovered that this group is the fasted growing segment of home buyers.
- This is a massive, growing business. Currently there it is there are more than 15 million households living in rented single-family homes are being used as rental property and that number is projected to keep growing.
- While there are many investors who have more than 10 homes in their portfolios, 54% of landlords of single-family homes own only one property, according to John Burns Real Estate Consulting and RentRange.
- There are at least 18 groups who have over 1,000 homes in their portfolio.
- A surprise to me was the large number of investors paying all cash. Indeed there are benefits of paying cash but for me leverage is one of the best benefits real estate has to offer.
- Those who have too aggressive of an ROI goal are missing the opportunities and tend to never make any investments
There was much to learn at the conference. I could list examples all day of the dozens of panels that were given during the event from financing to landlording to buying in bulk and of course fix and flips.
The obvious conclusion
More and more people are finding that renting is an option that is appealing to them and the single-family home is their preference.
The obvious conclusion is single family home investing business is alive and well.
It is a business for small and large investors alike and will be here for a long time to come.