With the generous returns rental property ownership currently provides due to lower purchase prices after the Great Recession coupled with rising rents, Wall Street is waking up and jumping in the buy-to-rent game in a very big way.
Smart institutional money has bought over 120,000 properties in the past 2 years. In addition, institutional investors are buying up regional turnkey and property management companies in the buy-to-rent industry.
Why is buy-to-rent a very hot topic for hedge funds, fund analysts, and investment media? It started when marketing legend Warren Buffett and Stephen Schwarzman, CEO, Chairman, and Co-Founder of Blackstone Group started buying tens of thousands of single-family rental properties. Since then, this asset class that was once predominantly owned by individual investors has attracted attention by the big boys on Wall Street.
Wall Street investment funds are pouring capital into rental properties, making real estate a mainstream asset. This has given credibility to an asset class that in the past has been treated casually by investment experts.
With it’s ability to generate dependable monthly income, potential appreciation, and very favorable tax treatment, rental real estate has the capacity to build portfolios faster than any other asset. Given the unique benefits of owning real estate as an investment, it’s actually surprising it has taken Wall Street this long to get on board. Consider these facets of investing in rental property
- The investment is secured by a title filed with the local county recorder, and insured with title insurance for even more safety
- It is possible to leverage the investment 3 to 5 times the amount of the initial investment (or purchase deposit) by borrowing against the title
- The principal is insured against loss via property insurance
- Rental rates rise with inflation resulting in increased income over time when coupled with a fixed rate mortgage
- Rental income insurance can be used to guarantee rental income
- A professional property manager or turnkey investment company can provide sustained rental income and property maintenance with little oversight on the investors part
- Appreciation increases the value of the property/investment
- Rental income pays down the mortgage, providing additional returns
When looking at traditional investment asset classes such as stocks, bonds, mutual funds, commodities, etc. none come close to having these advantages. With real estate you can insure your capital, your interest, and your income. Try doing that with your stocks and bonds!
Summit Assets Group has a small number of turnkey properties available in strong rental markets, providing dependable, no-hassle monthly cash flow for real estate investors. Call us at 888-298-0652 to discuss available properties or send us a message online 24/7.