Single-Family Rental Investors Bullish on Future: NAR Survey

Contributing Writer, B2R Finance | Financing,Real Estate,Real Estate Investment

By Robert Greenberg, VP Marketing, B2R Finance

Investment properties can be found close to home and solid opportunities exist to purchase additional rental properties over the next two years, according to the National Association of Realtors’ 2015 Investment and Vacation Home Buyers Survey.

Here’s a look at some of the survey’s highlights as they relate to investment buyers:

  • The typical investment buyer plans to own his or her investment property for five years. 61 percent of investment purchases were single-family detached properties.
  • 56 percent of investment sales were traditional sales, and 44 percent were foreclosures or short sales.
  • The typical price paid by investors for a property was $125,000, down from $130,000 in the prior year’s survey.
  • The typical investor property was 24 miles from the investor’s primary residence (more on investing beyond your 25-mile radius here). 32 percent of investment properties were in the suburbs or in subdivisions with 26 percent in urban centers. The remaining properties purchased were in small towns, rural areas or resort areas.
  • Most investment properties—37 percent—were purchased in the South, followed by 26 percent in the West, 20 percent in the Midwest and 17 percent in the Northeast.
  • 27 percent of investment properties were less than 1,000 square feet, 41 percent were 1,001 to 2,000 square feet, and 32 percent were more than 2,001 square feet.
  • 59 percent of investment buyers used a mortgage for their purchase.
  • Cash buyers declined to 41 percent from 46 percent a year ago – suggesting that utilizing financing may be a growing piece of investors’ acquisition strategies.

FEELING OPTIMISTIC

NAR said that investors continue to be optimistic and active in the housing market despite lower inventory, housing price increases and some financing hurdles.

The survey indicates that 68 percent of investment buyers say they are likely to buy another investment property within the next two years. The survey also found that 41 percent of owner-occupants who purchased a primary residence last year are likely to buy an investment property within two years.

To gather the data, NAR surveyed households in March who had purchased any type of residential real estate during 2014. Nearly 2,000 people responded to the survey. Respondents were sampled to meet age and income quotas representative of all homebuyers drawn from the 2014 NAR Profile of Home Buyers and Sellers.

B2R Finance offers rental investors innovative lending products to help unlock equity from existing portfolios and provide the cash needed to build rental portfolios nationwide. For more information about how B2R can help you obtain rental property financing, just call 800-227-8107 or visit www.b2rfinance.com/borrowers and follow us on Twitter @B2RFinance.

The information on this page is provided for informational purposes only and does not constitute investment, real estate, or legal advice. This information should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. No representations or warranties whatsoever, express or implied, are given as to the accuracy or applicability of the information contained herein. The information may be modified or rendered incorrect by changes in the marketplace or developments in the law, or for any other reason, and may not be applicable to any individual reader’s facts and circumstances.