A recent report from RealtyTrac, a provider of housing data, surveyed single-family homes in particular markets across the country in December of last year. Comparing the results from its most recent survey to those from three years ago, RealtyTrac suggested it might be time for investors of single-family homes to sell their investments. The results concluded that some investors could stand to make as much as 38% - 43% return on their initial investment if a home was purchased by the middle of 2012.
However, many investors, institutions, and economic advisors suggest that if investors hold on to their properties for much longer, they may not see as much growth as they had in the past three years. While double-digit increases in appreciated value were the norm, experts predict that 2015 will have a leveling off of home appreciation.
While this leveling off may have a less than favorable effect on institutional-type investors, current and upcoming home buyers - as well as small- to mid-sized investors - may reap some of the benefits. As profit margins hit their peak in the early part of 2015, investors may look to sell these investment vehicles to maximize their profit on both rental income and appreciated value.
When there are more homes on the market, buyers tend to have more favorable terms when it comes to negotiations. Currently, areas of Florida are seeing less than 5 month housing supply, and it some areas around a 4 month housing supply. Generally, a 6 month housing supply indicates a stable real estate market. Anything below that threshold indicates a seller's market.
Experts predict that the most likely buyers for investment properties will be smaller, local investors who will still use the property as a rent producing asset. These smaller investors are benefiting from the easing of financing qualifications that allows them to leverage some of their investment. Previously, institutional-type investors did not need financing as they could use cash to make their purchase and improvements of the property.
Moreover, local investors will have a significant advantage over large investors in that they are more grounded in the day-to-day operations of the rental. Leasing, maintenance, and turn-over issues are all solved better when done on the local level.
However, many investors, institutions, and economic advisors suggest that if investors hold on to their properties for much longer, they may not see as much growth as they had in the past three years. While double-digit increases in appreciated value were the norm, experts predict that 2015 will have a leveling off of home appreciation.
While this leveling off may have a less than favorable effect on institutional-type investors, current and upcoming home buyers - as well as small- to mid-sized investors - may reap some of the benefits. As profit margins hit their peak in the early part of 2015, investors may look to sell these investment vehicles to maximize their profit on both rental income and appreciated value.
When there are more homes on the market, buyers tend to have more favorable terms when it comes to negotiations. Currently, areas of Florida are seeing less than 5 month housing supply, and it some areas around a 4 month housing supply. Generally, a 6 month housing supply indicates a stable real estate market. Anything below that threshold indicates a seller's market.
Experts predict that the most likely buyers for investment properties will be smaller, local investors who will still use the property as a rent producing asset. These smaller investors are benefiting from the easing of financing qualifications that allows them to leverage some of their investment. Previously, institutional-type investors did not need financing as they could use cash to make their purchase and improvements of the property.
Moreover, local investors will have a significant advantage over large investors in that they are more grounded in the day-to-day operations of the rental. Leasing, maintenance, and turn-over issues are all solved better when done on the local level.
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