It hasn’t been an easy road for investors in real estate in the last decade, but the tide has been turning and opportunities have continued to rise despite the tighter controls on lending. To get a clearer picture into why it’s been tough, let’s take a look at the recent move by BlackRock, Inc. to finance investors buying single-family homes.
According to a Bloomberg Business article that came out late in August, the world’s largest money manager, BlackRock is going to be making a major move.
[It] will buy loans from a network of partners that offer financing to the firm’s specifications starting as soon as next month, said two people with knowledge of the plans, who asked not to be identified because the information is private. Its lending partners also will offer funds to renovate homes that will become rental properties.
Why is this a big deal?
BlackRock Inc. is one of several companies which have made a move on financing investors who are looking to buy single-family homes. What’s interesting is that while the economy is improving, rental demand in general just continues to rise. With homeownership not budging much, investors can expect more security and a healthy number of ready renters.
What are some of the factors in the expanding rental market?
According to the article, the big factors coming into play now in favor of the investor include:
- Increased competition among investors
- Low home ownership rate (the lowest in over five decades)
- More loan availability
- Greater cash flow
- Higher returns on investment
Bottom line. If you’re looking at the single-home ownership rates right now and thinking of investing, the time is prime. With money managers like BlackRock positioned to front hundreds of thousands and yields only expected to keep climbing, investors have a stand to benefit all the way around.
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