As most investors know, there are a number of different dynamics going on in the housing market right now.
Supply is low, demand is high, and mortgage rates are low. Investors are buying these investments up, and there’s not much inventory.
Noel Christopher, Senior Vice President of Portfolio Services, says that SFR investments remain a solid investment. In this space, rent collection and occupancy rates have always trended higher than multifamily, but even throughout these current times of economic instability, the trend has continued. SFR as an investment has remained strong. The entry-level home buyer and the entry-level renter are essentially the same person, says Noel –they may not be able to buy right now, due to the economic impact of the covid response. But they will still need housing, and demand for SFR rentals is still high.
The Build-to-Rent Sector
In this podcast, Noel and Kevin also discuss the rise of the build-to-rent sector, and highlight how investors can get started with that. The build-to-rent sector refers to homes that are being purpose-built as rentals and sold direct to investors. Often, this refers to homes that are built as scattered rental homes, throughout a development where many homes are sold to homebuyers. This helps to give investors long-term appreciation, as the homes increase in value, and for renters, it’s also removing any stigma that may have been attached to renting.
These properties are easy to purchase, require far fewer repairs and maintenance, and are easier to manage as well. They’re also easier to rent, and are tremendously appealing to renters.
Learn more about the build-to-rent sector here.
RW Select
RW Select is an exciting new platform that we’re launching at Renters Warehouse. This platform helps to connect rental investors with new-build homes that are occupied or ready to be occupied. These properties have great yields and are in outstanding communities. These homes typically are in nice neighborhoods and attract homeowner-type tenants, who are going to take better care of their home. The properties usually include warranties as well.
Take, for example, the new construction homes that Renters Warehouse has in Houston, for example. These homes have around 4.5% cap rates; but appreciation is a solid 6%, so you’re buying appreciation too and looking at solid 10% returns.
Checkout RW Select to learn more.
There’s a huge demand for single-family rentals right now. Millennials, the largest group of renters today, are starting families –and they’re not looking to go back to apartments –they’re looking for SFR. “But there might be a bubble,” Noel hears people saying, but he doesn’t see this demand going away any time soon. People are still looking for rentals to live in, investors are still looking for rentals to invest in, and this market is on fire.
Also, build-to-rent SFR is one area where investors can make a difference. It’s participating in the good of your community, making an impact on people’s lives and providing housing stability to families and children, giving them a place to live and providing long-term housing. When it’s time to sell, the RW Select platform helps to facilitate the sale to another investor, so there’s no need to worry about evicting a family and then selling the home to another homebuyer.
If you want people who stay put and take pride in the home, providing them with quality, long-term, stable housing is the way to go. These tenants will pay the rent on time, and will look after the home like it’s their own –after all, they’re in it for the long run as well.
If you enjoyed today’s podcast and would like to keep up with Noel, what he’s doing, and his insight into the housing market, be sure to visit his LinkedIn portfolio. He’s regularly sharing his thoughts and research on the SFR market. Ideal if you’d like to learn more about investing in the build-to-rent sector.
See all of the Renters Warehouse podcasts here.
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!
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