Opportunity Abounds Even as Institutional Investors are Buying Single Family Rental Homes

Published: Jan 27, 2022
Investing in the Single-Family Rental Market

If you ever wondered when was a good time to jump into single-family rental housing, your answer might be found in Conroe, Texas.

That’s the town about 40 miles north of Houston where a 124-unit development built by D.R. Hilton sold at a 50 percent premium in December after a bidding war that included a blue chip roster of investors and home rental firms.

If the so-called “smart money” is seeing the upside in the single-family rental market, we think that small investors who want to get involved are on the right track.

Useful Tools to Invest in Single Family Homes

Fortunately, there are tools they can turn to for help, starting with Mynd Investor Services. Investors can plug in the numbers that fit their budget to find a property to buy. After the purchase, an investor can tap into the property management services offered by Mynd to help with showings, leasing, rent collection and property maintenance.

With the future of brick-and-mortar retail growing dimmer as more people click on Amazon’s buy button, and doubts about how many workers will be returning to offices, faith in the future of commercial real estate has been undermined. Investors in that space are looking for a place to earn a safe return on their money. 

“There’s a lot of money flowing into the residential market,” said Don Ganguly, senior vice president of Mynd Investor Services.

With all this cash chasing fewer homes -- supply and the time that homes are on the market are near record lows -- talk of a bubble can’t be far behind. Prices may be climbing, especially in the hottest markets like Houston, Miami, Phoenix and Las Vegas, but it’s not too late to get in.

Rising Home Prices Predictions

The John Burns firm believes there is room for growth. It expects home prices to climb 12 percent this year, after rising 11 percent last year. It also projects an increase of at least 6 percent in 2022, a period of appreciation reminiscent of 2004 and 2005, with a crucial difference.

The last time around mortgages were being handed out with fewer controls, and many buyers were counting on refinancing loans to keep properties afloat. When the house of cards collapsed in 2008, it sent a shock through the economy that took almost a decade to recover from.

Wrapping Up

These days, mortgage qualifications are stricter, though rates are still historically low. With the demand for bigger homes with yards unlikely to abate, growth outside major cities seems poised to continue. So whether the buyer is a millennial with a smartphone, a senior browsing on their desktop, or a Wall Street blue chip firm, the expectation is that these investments will pay off in both the short and long term.

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