5 Trends Real Estate Investors Should Watch in ’19

A recent essay in Forbes by Roofstock CEO & Co-Founder, Gary Beasley, outlines what he sees as the five trends real estate investors should be watching.

“…The increased interest I’ve observed in the single-family rental sector can be attributed in part to the recent volatility in the equity markets and the growing uncertainty around when the economic expansion will finally lose steam.”

The five real estate industry trends that Beasley says savvy investors should be watching are:

  1. Build-To-Rent Properties In Secondary And Tertiary Markets
  2. Large Capital Partners Entering Joint Ventures
  3. Retail Investor Interest In Single-Family Rental Homes
  4. Renting As A Lifestyle Choice
  5. Getting Creative To Satisfy Demand

Click here to read the full story on Forbes.com.

 

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Zumper’s National Rent Report for May

Rental information site Zumper recently released their National Rent Report for May showing that the median national rent for 1-bedroom apartment was $1,215 and the median two-bedroom rent was $1,463.  Year to date, one bedroom prices are down 2.5% and two bedroom prices are up 2.9%.  Zumper analyzes rental data from over 1 million active listings across the United States. Data is aggregated on a monthly basis to calculate median asking rents for the top 100 metro areas by population, providing a comprehensive view of the current state of the market. The report is based on all data available in the month prior to publication…..be sure to check out their entire list of 100 cities.

Click here to read the full report at Zumper.com.

 

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America’s Highest Rent Neighborhoods

Where are the neighborhoods in America where the typical renter is throwing down $10k, $15k, or even $30k a month?  While that does sound like quite a bit of coin, there are neighborhoods across the county where landlords are fetching those amounts.  After all, nearly one third of Americans are renters and not owners.  Leave it to Realtor.com to zero-in and locate these neighborhoods and then rank the top 10.  To come up with their list, they pulled every two-bedroom rental on realtor.com (as of March 2019) and then calculated the median rent price for every ZIP code.  To keep it even, they excluded ZIP codes with fewer than 12 listings and limited the ranking to no more than two neighborhoods per state (or else CA and NY would dominate).

“The math between renting versus buying is starting to lean toward renting,” says Dolly Lenz, a New York–based luxury real estate broker. “They can’t deduct as much on their taxes anymore—so it makes less sense to buy.

Click here to read the full story on Realtor.com.

 

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Improving Neighborhoods, One Home at a Time

Improving Neighborhoods, One Home at a Time

By Rebecca McLean
Executive Director, National Real Estate Investors Association

There is no doubt about the critical need for affordable housing in America today.  Affordable housing allows families to have a stable home, offering countless benefits to children by helping families stay connected to the communities they choose where they have found medical care, churches and schools.  Stability helps keep families together.  However, there is another benefit of providing affordable housing; it becomes a pathway to homeownership, a way to build financial security.

Members of the National Real Estate Investors Association work every day to improve neighborhoods, one home at a time, doing our part to provide safe, affordable housing to Americans at all income levels.  Whether it is rehabbing an older distressed home or providing rental housing, our members are on the front lines of this important issue.

However, there are some concerns about housing in general that need addressed.  Well-intended regulations often drive up the costs of rehabbing older housing and building new housing.  In some areas the opportunity for developing affordable housing is so diminished it is non-existent.  What little housing that gets built tends to be higher-end where the profit-margins are greater and the costs more easily recouped.  Often this creates a disincentive to develop affordable housing.

With the best of intentions, lawmakers often respond to the lack of affordable housing by passing more laws and regulations.  Each new law starts the cycle of unintended consequences.  It makes for good press conference soundbites, but it’s not that simple.

In reality, America actually has a huge supply of affordable housing, though much of it is in rough shape.  That’s where our members play a vital role.  In many communities across the country, deferred property maintenance has taken a heavy toll – especially on older homes.  Whether it was because of neglect or a lack of resources from the owner, a lot of homes are in dire need of rehabilitation.  This causes legislative knee-jerking in the form of punitive property maintenance codes and regulations.

We like to say neighborhoods can be improved one home at a time and it is certainly true.  National REIA members often seek out and identify distressed properties in neighborhoods that no one wants to touch.  They rehab those properties and add value not only to the community (removing blight, abandonment, etc.) but strengthening the local tax-base as well through increased property values.  Families looking for starter homes (to buy or rent, depending on their situation) are then able to find quality, affordable housing in a neighborhood that meets their needs in a location of their choosing.

This is a big deal for those in lower income communities especially when it comes to accessing good paying jobs and quality schools.  Many families also want to put down permanent roots.  Buying a home allows them to build financial security while providing stability for their family.  It is a win-win.

Finally, there is one item on the horizon that will potentially have an incredible impact on the supply of affordable housing – Opportunity Zones.  As part of the Tax Cut & Jobs Act of 2017 (now law), these zones have the power to have profoundly impact distressed communities across the nation.  We believe the tax incentives provided by this new law will spur a wave of redevelopment that will not only provide a steady supply of affordable housing, but embody the old axiom of a rising tide lifting all boats.

After all, a diverse housing stock providing affordability at all levels of income is key to helping Americans attain the American Dream – whether it is homeownership or a comfortable rental home, National REIA members are helping families make that possible….one home at a time.

 

Rebecca McClean is the Executive Director of the National Real Estate Investors Association.  National REIA is federation of local associations or investment clubs throughout the United States that represents local investor associations, property-owner associations, apartment associations, and landlord associations on a national scale. Representing the interests of approximately 40,000 members across America, they are the largest broad-based organization dedicated to the individual investor.

Click here to learn more about National REIA or to find an affiliated group near you.

This essay was also published on Media Planet in March, 2019 as part of expose on Affordable Housing.

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An Airbnb for Farmland?

We have seen a lot of “airbnb-like” sites pop up over the years – for things like camping, hunting & fishing, and even one where you can sleep on a boat. Now we’ve come across a platform where you lease your farmland (or find some land to lease).  It’s called Tillable, and they will help you get a fair-market offer on renting your land for the next growing season.  They say they will “handle all the details, ensuring farm data is tracked and the land is treated with respect.”   Tillable also says it improves farm management with their digital leases, automated payments, and data collection which gives farmers an opportunity to expand their operations.  Indeed…Do you have any land you want to rent out???

“…Farmland is a finite resource. We care deeply about shining a light on its true value, and protecting it for years to come. By addressing the inefficiencies and lack of information in the $32 billion farmland rental market, Tillable enables landowners to make better decisions about their farmland assets, and encourages farmers to expand operations responsibly. As a result, farms thrive through more careful stewardship and improved productivity. And when farms thrive, the people who own and care for the land thrive, too.”

Click here to read more about Tillable.

 

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Yardi: Market Dynamics Continue to be Healthy Almost Everywhere

According to the latest Yardi Matrix, U.S. multifamily rents rose slightly in March, coming in at $1,430 with year-over-year growth dropping slightly to 3.2%.  Yardi says that market dynamics continue to be healthy almost everywhere.

“The dynamics continue to be healthy almost everywhere. That gives investors a choice between potentially higher growth and higher yields in faster-growing, less-liquid markets, or slower, steadier growth in larger, more liquid markets.”

Click here to read the full report at Yardimatrix.com.

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The Big Opportunity for Investors in Opportunity Zones

We’ve been talking a lot about Opportunity Zones and you will undoubtedly hear more about them going forward.  A new report by Yardi takes a look at the tax incentives for investing in the 8,700+ opportunity zones across the country that were created by the tax reform passed by Congress in 2017.  Yardi says there are roughly 1.9 million multifamily units, 960 million square feet of office space and 180 million square feet of self storage space that are either in place or under construction in these opportunity zones.  They say the “opportunity is enormous” as there is a huge incentive for real estate investors – especially in low-income areas.  Indeed…

“The heart of the program is an incentive to reinvest capital gains, which must be placed in a qualified “opportunity zone fund.” Funds can be single- purpose vehicles or commingled. Shareholders who keep their investments for five years will pay no taxes on 10 percent of the investment’s gains.  After seven years, 15% of the gains will not be taxed. Shareholders who hold opportunity zone investments for 10 years can avoid paying taxes on all gains. Among the qualified investments are real estate, businesses and infrastructure.”

Click here to download the report at Yardimatrix.com.

Click here for an interactive map of Opportunity Zones across America.

 

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Home Sale Prices Jump in Opportunity Zones

According to new research from Zillow, real estate investors appear to be flocking to Opportunity Zones.  Their data show that areas designated as Opportunity Zones saw a surge in sale prices since that designation was made, which they say is an early sign that investors are eager for the tax breaks. Interestingly, they said that Census tracts that were eligible but were not chosen as Opportunity Zones saw a slowdown in sale price appreciation, while prices in designated Opportunity Zones grew by more than 20% annually.  Indeed…

“It’s still early, but we’re already seeing some signals that folks have begun to take up Uncle Sam on this offer,” said Zillow Policy Advisor Alexander Casey. “The rationale behind the zones is relatively simple. Proponents argue that a lot of the money generated as capital gains could be used as seed money in traditionally neglected communities – revitalizing infrastructure, fueling economic growth, and spurring job creation and overall prosperity. But whether this tax break will direct funds to the communities that need them the most – or what happens when money arrives – remain open questions. But what’s clear in the meantime is that among the vast array of neighborhoods selected as Opportunity Zones we’ve witnessed wildly different housing market trends up to this point, which might hint at the future of these communities.”

Click here to read the full story on Zillow.com.

 

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Delinquency and Foreclosure Rates Lowest in 20 Years

According to the latest CoreLogic Loan Performance Insights Report, as of January 4% of home mortgages were in some stage of delinquency – the lowest level in 20 years.   This rate includes all home loans 30 days or more past due and includes those in foreclosure.   In addition, CoreLogic points out that no state logged an annual gain in its serious delinquency or foreclosure rate, however North Dakota posted a gain in the overall delinquency rate.

Click here to read the full report at CoreLogic.com.

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Zumper’s National Rent Report for April

Rental information site Zumper recently released their National Rent Report for April showing that the median national rent for 1-bedroom apartment was $1,214 and the median two-bedroom rent was $1,445.  Year to date, one bedroom prices are down 0.5% and two bedroom prices are up 0.6%.  Zumper analyzes rental data from over 1 million active listings across the United States. Data is aggregated on a monthly basis to calculate median asking rents for the top 100 metro areas by population, providing a comprehensive view of the current state of the market. The report is based on all data available in the month prior to publication…..be sure to check out their entire list of 100 cities.

Click here to read the full report at Zumper.com.

 

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