“I’m thinking of holding off until the market cools.”
“I’m not sure if now is the right time to invest.”
“I’ve heard the housing market’s going to bottom out soon.”
For many, there’s a level of uncertainty when it comes to investing in real estate today, and for good reason. For years now, there’s been plenty of news circulating, speculating about how there’s an impending housing market collapse –always just around the corner.
Greg Rand, however, has long taken a starkly different view.
“A whole lot of people that were talking down the housing market over the last couple of years wised up when they made their 2020 predictions,” says Greg. “They’d been making 2020 predictions for a long time, saying it was going to be a bad year, and when the moment was upon them…they all came back around again and acknowledged that it’s looking great for the housing market this year.”
“We, of course, have been consistently saying it’s going to be a great, and people have been saying, ‘Well, you’re overly optimistic.’
Well, now all the pessimists are getting optimistic.”
Housing is in demand, and there’s a short supply in many markets across the country. While there’s been a lot of talk about the impending housing market collapse, many experts are now starting to change their tune.
Greg’s long gone against the grain when it comes to analyzing the property market; he’s never been one to get caught up in the hype that spells out all doom and gloom for the housing market. For years now, he’s been analyzing the data, and making predictions –that usually pan out:
Greg believes in looking at the numbers and reading the housing market stats yourself. Learn to read the market, learn the cause and effect –when prices go up, there’s a slump in purchases, when prices go low enough, there’ll be an uptick in buyers. This is basic economics 101, but it’s often neglected by many so-called experts out there who love to put a negative spin on things.
So what does Greg believe is in store for this year? That the housing market’s likely to continue to grow in 2020, but it may start cooling a bit.
He says he’d be happy to see 2020 finish with a 4% housing appreciation rate, but he thinks it may be slightly shorter than that. He puts appreciation at 3.6% by the end of the year.
A little easing of the steepness of the pricing curve helps affordability, which means homes will continue to sell.
Greg also highlights the value of long-term investing.
Even if there is a slump or temporary cooling in the market, the great thing about SFR is that if you invest with a long-term strategy, it’s largely recession-proof. If you can anchor your investment to something that’s going to continue to increase in value, and going to continue to generate cash flow each month, then you’re going to be able to weather any temporary dips.
Express Listing with Renters Warehouse
There are some exciting developments happening at Renters Warehouse. One of the new product innovations that Greg’s been working on for the past six months is about to hit the market: Express Listing.
Greg explains that this tool will help investors to buy and sell investment properties quickly and easily –properties that are already rented, with tenants.
When you own your own home, you have a level of security that comes along with it. Tenants, however, don’t have much housing stability at all. The landlord could decide to sell at any time, which means that when their lease runs out, they could have to face the fact that it won’t be up for renewal.
Normally when it comes time to sell, a traditional real estate agent will only see the house once the property’s vacant. But Express Listing is designed to close the gap between investors who are looking to sell, and those who are looking to buy. It’s a win-win for sellers, buyers, and tenants as well.
The fact is that SFR has long been primarily sold by Realtors as homes to live in, not as investments. Realtors, by and large, have neglected this segment of buyers, despite the fact that 17 million SFR homes across America are currently rentals. Additionally, even according to the national association of Realtors (NAR), 25% of all home sales are to investors.
Tips for Investing in 2020
Finally, Greg shares the top three things that someone looking to invest in real estate in 2020 should do:
- Start now. Making a 30% down payment is ideal, says Greg. And it’s important to start working towards that now. Start saving and start researching so when you can buy, you’ll be ready.
- Where you buy is more important than what you buy. Pay attention to population trends. What are the drivers of population growth that are keeping people in place? Or causing people to move in?
Tip: Visit the Renters Warehouse Research Center to gain valuable insight into population trends, home price performance, and more. See market data for any housing market across the country. It’s free! Try it today!
- Research neighborhoods. Once you have a market in mind, you’ll want to dial in your research. Get specific. Look for areas that may be getting a train station, or neighborhoods that are up-and-coming and increasing in value. Amazon is another good trend to watch for. Amazon is creating a number of mega distribution centers in select locations throughout the country. When you see one of these moving in, think about the implications. What does it mean? For one distribution center that recently moved in near Charlotte SC, near where Greg lives, it indicates that there are roughly 2,500 jobs moving in, paying an average of $55,000 per year. Buying near something like this will put upward pressure on your property values, and your rental prices as well –as there will be a lot of people looking, and competing, for housing.
Should first-time investors look to create an investment strategy that’s close to home? Should they start out buying property in their own local area? That depends, says Greg. You do gain an advantage when it comes to investing in your own backyard as you’ll have inside knowledge on the local area, and you can drive by and see the property –and keep a closer eye on it. If you’re in a place where rental properties are sky high, though, or if you live in an area with poor investment prospects, then feel free to expand your net. Consider looking into secondary places that you’re familiar with –maybe places that you vacation to or the location that your parents retired to.
Or, if you have a place that you’re interested in –get it on your radar and work out from there, learning as much about it as you can. The key is being familiar with the area –and that’s what will give you an advantage.
What are your thoughts? What are your predictions for 2020? We’d love to hear them!
If you enjoyed today’s podcast, then be sure to check out Episode 02: Future-Proofing Your Investments, where Greg Rand shares his strategies for building a long-term portfolio.
And of course, if you’d like help with your investments or would like to create a real estate investment plan, visit Renters Warehouse. Live, invest, and rent –all under one roof!
Back to Posts