A Student of the Real Estate Game


My Thoughts on the Single-Family Rental (SFR)

Mar 17, 2012 | Market News, Multifamily

A few weeks ago I published a one-line post:

What did you do back when interest rates were the lowest of your lifetime?

For an investor and entrepreneur, these are truly unprecedented times, yet few are actually taking advantage of this economic landscape. I hope to look back in 20 years and have a good answer.

The greatest opportunity in real estate these days is the emerging real estate segment – the single-family rental. Heck, there was even a story on Planet Money of a 14 year-old Florida girl who purchased her own rental home!

From 5 years ago, roughly speaking, housing prices are down 30-50 percent and interest rates are down 30-40 percent. The effective cost of owning a home is cheaper than it’s ever been and more affordable than renting an apartment.

Despite all this, people aren’t buying homes because they are afraid of losing their jobs, they’re not confident in the economy or the can’t qualify for a mortgage.

From an investor standpoint this is an incredible opportunity. There’s no surprise that big funds are getting into the landlord game. Although there are different approaches to these investments, the bottom line is that if hold for a long time and purchase for low rates (and refinance if rates go down), houses are a great investment.

For me, SFR presents a way to take advantage of the once in a lifetime investment environment. I’m in the beginning stages of pursuing  bank-owned, auction, and other distressed avenues to buy my first investment property.

How are you taking advantage of the unique investment landscape?

P.S. Even sellers are looking for creative ways to deal with single-family properties. A broker in Arizona is taking the penny auction approach to selling a home through his site ibidacent.com.