I found a video recently of the worlds most successful investor, Warren Buffet, talking about why buying single family homes and renting them out is one of the best investment plays.
Check out the quick video of Warren below: (click the video to play)
If you’re at all thinking about buying rental properties soon, right now is the time.
What’s in Store (and already happening)
Already institutional investors like hedge funds, mutual funds, and private equity firms are shifting from buying stocks, to committing hundreds of millions of dollars (in some cases, billions) to buying foreclosed and REO houses, and renting them out. There is less volatility in this strategy, and the returns are often higher than the stock market.
If you wait, the supply of bargain properties will be low and will make it harder for investors like you and me to find good deals. Big national companies and iBuyers see this trend and are starting to buy houses too, like Zillow, Offerpad, Redfin, Opendoor, and Keller Williams. They are positioning themselves as an alternative to investors and to agents, which takes away from your opportunities. 10% of homes in some of the bigger markets are sold to these companies.
There is good news though. We are local and rely on relationships, which those companies cannot compete with. We still have deals, and should continue as we adjust our business to the shifting economy. If you’re interested in picking up a couple rental properties (or a bunch), make sure you’re on our Buyers list on this site so you can get our Discount Property Alerts every time we tie up a deeply discounted property.