Demand for single-family rental homes continues to be very strong. What’s driving, and accelerating this trend?
Investors are not only buying up multifamily apartments, and individual single-family homes, but are building more from the ground up, and are buying out entire new home construction developments.
This helped set new records for US house price growth in both February and March 2022. Days on market have been incredibly short. Competition for deals has been fierce in many areas, with multiple bids not uncommon.
Even with some economic slowing, it is only going to moderate this growth, not create a downturn. At least for a while. Perhaps it will only be responsible for accelerating the demand for single-family rental investments even more.
Why Single-family Rental Homes Are So In Demand
There are a variety of benefits of investing in real estate property in this niche that is driving this demand today.
These are some of them.
Recession Proofing
One driver of even more interest and activity in this sector is the need for investors of all types and sizes to recession-proof their money.
Deep losses in the stock market and crypto have certainly woken investors up to what’s happening out there, and the risks they face in other sectors. Those who know their history or have been through these cycles before knowing these asset classes offer no floor from losses.
Real estate on the other hand provides concrete downside protection. It is a way to limit potential losses or being completely wiped out. In many cases when other asset classes tumble, it drives up the value of certain types of real estate as well.
Income
Whether it is the loss of dividends from other investments or the big wake-up call the COVID pandemic delivered, everyone is far more keenly aware of the need to have alternative sources of income, multiple sources of income, and passive income.
All things which single-family rental homes deliver on very well. Providing great diversification in income, and strong income to price ratios.
Inflation Hedge
Inflation only seems to be heating up and snowballing. There appear to be many reasons to believe this will only compound in the short term. At least until policy manages to hammer the economy and cut off corporate and consumer spending.
Real estate is famous and prized for rising in line with inflation, and benefiting from it. It is a great tool for investors to keep up with inflation.
Even if the economy is crippled and turns into a recession or stagflation, many types of single-family rental homes will benefit from more demand from tenants.
The Best Way To Get Ahead Financially
For private individual investors, real estate remains the best way to get ahead financially. It is often the only viable option to beat everyday financial and time dynamics.
Then even looking at corporations in other industries, as well as large investment firms and banks, real estate continues to be an important theme, which has helped them stay financially strong, create value, and grow.
