Last week two Federal Reserve researchers answered that question with an analysis of returns on investment since 1926 and their findings won't make the housing industry happy.
In some markets--many of them in California--the home price rebound has pushed prices above their EHP level, which should be a caution sign for investors seeking to make money in a quick re-sale, according to the latest HomeVestor/Local Market Monitor Best Market Ratings for investors.
Real estate investors are responding to higher prices by buying fewer properties in the next 12 months and holding their rental properties at least five years or longer, according to a national survey of real estate investors conducted by ORC International for MemphisInvest.com and Premier Property Management Group.
By: Steve Cook; Sun, Jun 2, 2013
Boasting of spending up to $8 billion dollars to buy tens of thousands of foreclosures to convert into single family rentals, nearly 50 Wall Street investment firms set real estate markets on fire over the past 18 months. Now they are running for cover as soaring prices water down their return on investment.
By: Steve Cook; Thu, Apr 25, 2013
After accounting one out of four home sales in the depths of the housing recession and fueled turn-arounds in dozens of markets where waves of foreclosures and battered home values scared off other buyers, real estate investors today are playing a greatly diminished role in the housing recovery.
By: Steve Cook; Tue, Apr 23, 2013
In another sign of institutional investors' appetites for foreclosures, inventories of presale foreclosures have declined nearly twenty percent since last year as lenders have made volumes of foreclosures available via REO tapes to well-funded hedge funds eager to buy in bulk.
By: editor; Thu, Apr 4, 2013
Nearly 4 million more single-family homes have been added to the rental market since 2005. This new supply has fully caught up with the increased rental demand during the housing crisis - causing single-family home rents to flatten nationwide.
By: editor; Tue, Apr 2, 2013
Have real estate investments peaked? After years of growth during the Foreclosure Eva, investment purchases declined slightly last year after surging 64.5 percent in 2011. With the cost and competition to buy distress sales growing and prices for normal homes rising, will investors pull back and start cashing in their assets?
By: editor; Thu, Mar 14, 2013
Thirty-eight real estate markets have been tagged as "dangerous" for investors looking to make money on buying homes as rental properties in new quarterly data compiled by HomeVestors of America (known as the "We Buy Ugly Houses®" company) and Local Market Monitor.
By: Steve Cook; Wed, Mar 13, 2013
Last month the New Republic published a provocative article on hedge funds and real estate investing (Your New Landlord Works on Wall Street) by former TV producer David Dayen. He said out loud what many people have been whispering.
By: Steve Cook; Mon, Mar 4, 2013
The low prices that make foreclosures attractive to investors also make foreclosures toxic to communities and homeowners. The discount between "normal" priced homes and the prices paid for properties than have been through the foreclosure process can spell the difference between profit and loss to an investor at the same time that they drive real estate values into the ground.
By: editor; Mon, Feb 25, 2013
Single family home tenants are 18 percent more likely than apartment tenants to stay in their current homes five years or longer, suggesting that demand for single family homes, the fastest growing rental category, will be more stable than multifamily demand, according to a new national opinion survey released today by Premier Property Management Group.
By: editor; Fri, Feb 22, 2013
Expenditures on foreclosures and short sales drove the remodeling market in 2011, as investors spent more to rehabilitate each foreclosure they purchased to flip or rent than either lenders or owners who bought foreclosures to live in. However the rental share of overall spending on improvements has been shrinking since the housing bust.
By: Steve Cook; Mon, Jan 14, 2013
Demand for foreclosures is so great and supplies are so low in some of the nation's hottest foreclosure markets popular with investors that the price differences between REOs and full-price homes have virtually disappeared.
By: editor; Thu, Sep 20, 2012
Despite rising prices and shrinking foreclosure inventories, 65 percent of active real estate investors plan to buy as many or more residential properties in the next 12 months as they did in the past year, according to a new joint BiggerPockets.com/Memphis Invest national survey conducted by ORC International for BiggerPockets.com, the nation's largest and most active real estate investing social network, and Memphis Invest, one of the nation's leading providers of single-family rental real estate investment services.
By: Steve Cook; Mon, Sep 10, 2012
Soaring capacity may be starting to slow the tide of rent increases that have spurred real estate investment and the greatest multifamily construction boom in seven years and record numbers of single family rentals.
By: editor; Tue, Aug 28, 2012
Investor participation in the housing market dropped sharply in July, establishing a two-month trend and showing a clear reversal of long-term growth in investor purchases of residential properties, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.
By: Steve Cook; Wed, Aug 8, 2012
As interest grows in creating a marketplace to sell securitized blocks of single family rentals, similar to the securitization of mortgages, perhaps as early as this year, the authoritative ratings service Fitch Ratings today made it clear that the asset class poses some unique risks and that high investment grade ratings will be difficult to attain due to the lack of historical data and "ambitious growth strategies by regional operators".
By: editor; Fri, Mar 30, 2012
Investors bought 1.23 million homes last year, accounting for 27 percent of all existing homes bought in America, the greatest annual market share for investors ever recorded.
By: Steve Cook; Fri, Feb 24, 2012
Only two out of ten of the nation's 8.7 million single family rental properties are managed by professionals; individual owner/ investors take care of most of the rest. Last year only about a third of single family rentals, 35 percent, made a profit on their rental income. Some 2.3 million lost money for their owners.
By: Steve Cook; Tue, Nov 22, 2011
Low home prices and strong demand for rental properties are causing a surge in investor buying, driving up the market share of homes purchased by investors.
Anemic demand from owner-occupant homebuyers has forced investors to rent out about half of the homes they purchase -- as opposed to renovating and flipping the properties.
Monitoring the performance of two different property portfolios.
Monitoring the performance of a real estate equity portfolio.
By: Steve Cook; Mon, Jun 17, 2013
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