Recently I attended a three-day event in Miami focused on single-family home investing. In fact, I had the privilege of meeting some of you readers there. I was honored to be a moderator on one of the panels where I met the “who’s who” in real estate investing. It was indeed an action-packed, information-filled week with a wide variety of investors in attendance—from the small mom-and-pop investors to bigger investors who own hundreds of properties and even to institutional investors who hold over a thousand units in their portfolios.
Why would so many investors gather to discuss single-family home investing?
More and more people are choosing to rent instead of buy for a variety of reasons, and their preference overwhelmingly is the single-family home. Investing in single-family homes has become a very lucrative business—and one that is here for a long-term play. Because of the expansive growth and opportunity that single-family-home investing affords, it was a perfect time to unite and share the do’s and the don’ts of making this a successful business.
I was impressed by the variety of people who attended the Miami event. No separation here, as everyone from small mom-and-pop investors all the way up to large institutional investors, REITs, crowdfunders, house flippers and lenders found something to learn or to share with one another.
Dozens of panels were conducted, and the industry experts were happy to share their knowledge with an audience that soaked up the information like a sponge.
The main take-aways from the single-family home investors forum
- 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—along with a growing population—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 have been given much attention by investors because of their sheer numbers. As a group, they like to rent before they buy. However, at least one-third of Millennials express no desire to buy but instead plan to continue to rent.
- Single-family homes are the preferred choice of those who rent.
- An average renter household today consists of 2 adults, 1.5 children and a pet. So houses fit the bill best of all.
- Landlords are better served when they allow pets. They can protect their interest with pet fees and pet deposits.
- Those tenants who do plan to someday buy a house remain tenants for a longer period of time while they save for a larger down payment.
- Asians and Hispanics are seen as the fastest-growing segment of home buyers by the real estate and lending industries.
- Currently, it is estimated that well over 1.7 billion single-family homes are being used as rentals, and that number is projected to keep growing.
- A whopping 70,000 investors each have more than 10 houses in their portfolios.
- There are at least 18 groups who have over 1,000 homes in their portfolios.
- 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 are too aggressive in seeking ROI are missing the opportunities and tend to never make any investments.
Indeed, there was much to learn at the recent event. I could list examples all day of the dozens of panels that were given during the three-day event. The topics ranged from financing to landlording to buying in bulk and, of course, fixing-and flipping.
The obvious conclusion
More and more people are finding that renting is a beneficial option for them, and the single-family home is their preference.
It is obvious that the single-family home investing business is alive and well. It is a business for small and larger investors alike and will be here for a long time to come.
About the Author:
Larry Arth is the founder and CEO of Equity Builders Group, a Florida-based real estate investment group. A 36-year veteran of real estate investing, Arth also is an international consultant and speaker who each year assists hundreds of investors, both foreign and domestic, in realizing their investment potential. He analyzes locations for economic strength and for the largest and most sustainable returns and, most importantly, sustainable turnkey investment. His focus is offering turnkey investments to the passive investor.