A lot of investors are buying up properties at the end of the 2021 year. Investors bought 18% of the homes sold nationally in the third quarter of 2021. As a group, they spent upwards of 60 billion dollars making these purchases. Companies like Zillow, Opendoor, and Offerpad sold almost 23,000 homes during this period across the country.
Nationally speaking, owner occupied homes total 85 Million while 41 million are renters. Of that 41 million rentals, 85% are owned by investment groups while only 15% are owned by mom-n-pop individuals or small companies.
Several large Investment groups are opting to purchase large complexes in lower income areas in an attempt to upgrade and modernize the complex to such a degree that they will be able to double or triple the current rental rates. The challenge they face is getting tenants that can afford that rate to move from areas that may be more attractive.
When it comes to individual home buyers trying to get into a property there are several challenges facing the industry. The first is supply, competition and the building of new units, the second is the rising price of properties, and the third challenge is the interest rate in order to be able to afford the mortgage. The bottom line is that a simple solution that in effect wipes out or counters all of these challenges is a rise in income. If you are able to make more money, and save more money, eventually you will be able to afford higher priced properties at possibly higher interest rates. Sales, or income solve all financial challenges. People now, more than ever are needing multiple streams of income to buy or rent.
