The vast majority of single family rentals (SFR) are bought and sold by small investors. However, this “cottage industry” started to transform after the 2008 housing crisis as institutional investors (those buying or selling more than 10 homes per year) and foreign investors entered the market to buy up houses with depressed prices.
For example, the Blackstone Group, a private equity company, invested $5.5 billion dollars buying 50,000 single family homes after the sub-prime mortgage crisis. Foreign investors increased their investments in U.S. single family homes by over $100 billion last year alone. And, Real Estate Investment Trusts (REIT) have also grown in the single-family residence industry because returns from rental property investments have outpaced anemic returns from alternative investments.
These more sophisticated investors set the stage for a new breed of brokers to buy and sell single family rentals. The most prominent ones today include Investability.com (an ally of Real Property Management offices), OwnAmerica, Roofstock, VIPhomeshop, among others. Using their online systems, a large or small investor can seek out investment properties anywhere in the country based on geography, price, cap rate, and other criteria. And since a leased property is more valuable than a vacant one, their listings often include these investment opportunities.
Although the influx of institutional and foreign buyers may have inspired brokers to build new systems, the irony is that small investors, who have always been drivers of the rental market industry, may be the ultimate beneficiaries. No longer does the small investor need to look in just his or her community for investment opportunities. Now one can find dozens or hundreds of properties matching investment requirements while sitting at home with their computer.
Say you are an investor interested in buying a rental property in Orlando, Florida where you might someday want to retire. Go to our page on finding investment properties, fill in the “Search for Investment Property” form, and “Run This Search.” You’ll find hundreds of investment opportunities. Click on a property, and you’ll get estimates of the gross yield, net yield and cash flow based on projected costs and rental income. The calculator section permits you to customize the calculations. If you are interested in learning more about the property, there is a contact form and follow-up phone number.
While much of the information is like what you might find on Zillow, Trulia, or Realtor.com, these new tools provide additional information important to investors. Take a test drive, and give thanks to the institutional investors who motivated the development of these new tools. Happy hunting!
With over 300 offices in North America, chances are you will find a Real Property Management office near your new investment property.