Single-family investing is a profitable niche. Big companies continue to expand their inventory, but it’s unclear how much they can grow before there’s a public backlash.
NEW YORK – Wall Street firms are more eager than ever to buy family homes, evidenced by Blackstone’s real estate investment trust (REIT) recent purchase of a portfolio of apartments for $5.1 billion from insurer American International Group. In June, the investment firm also spent $6 billion on Home Partners of America, a company that owns more than 17,000 houses across the United States and offers renters an option to buy.
In addition, private-equity giant KKR launched a new division that will buy homes to rent them out.
Large Single-Family Investors Are More Prolific
Large investors’ single-family home activity is expected to increase now that the COVID-19 pandemic has made owning family homes more attractive. While the rents collected from commercial real-estate assets such as malls and offices took a hit during the COVID-19 crisis, most private residential tenants continued to pay up.
Family homes could be an even better long-term bet than owning e-commerce warehouses. Real-estate research firm Green Street estimates that renting out U.S. single-family homes will deliver annual returns of 6.6%, compared with a forecast of 6.3% for industrial property.
So whether you’re an investor looking for additional income or a renter purchasing your first home, it’s a great time to buy. Take advantage of today’s extremely low-interest rates and keep your mortgage payments low. Currently, renting and want to buy your first home? Click Here for a special report “How To Stop Paying Rent and Own Your Own Home“. To get insider VIP Access to our website Click Here and start exploring the real estate landscape and instantly access our exclusive library of special reports and resources.
*Source: Wall Street Journal (07/23/21) Ryan, Carol