Residential Investors Broaden Property Hunt

May 6, 2015

Some single-family residential investors are casting a wider net with their property searches, as home prices rise and inventories shrink in many markets.

Houses priced $40,000 and under are getting less attention, according to Visio's 2015 Annual Residential Real Estate Investor Survey, answered by nearly 200,000 investors. Instead, single-family investors report targeting higher priced homes.

“This is likely in response to generally rising prices and picked-over inventory,” according to the report. “Interestingly, the higher the price band, the greater the increase in the number of investors considering homes in that range, with 63 percent more investors looking at $200,000-plus houses this year than in 2014.”

Active investors, however, say they search the full spectrum of housing prices in trying to find the best deals. Investors who purchase fewer than seven properties mostly search in the sub-$150,000 ranges, the report finds.

“In a sign that deals are getting more difficult to find, more investors are looking statewide and even outside their home state this year, with 34 percent venturing that broadly,” according to the report.

For investors who are looking outside their home state, Florida remains the No. 1 location, followed by Georgia, Texas, North Carolina, South Carolina, Tennessee, and Ohio.

Despite rising prices, single-family residential investors are optimistic as rental demand stays strong. Forty-nine percent of the 200,000 investors surveyed say they plan to buy at least four houses this year (compared to 38 percent of investors who said that last year), according to the survey.

The U.S. has more than 14 million single-family rental properties.

Source: Visio Financial Services