Families and individuals want to own their dream home. House and land packages have been really doing well in the market. Even the rental of homes industry is also on the boom as more and more people are looking for a temporary or permanent place to stay and protect their family.
In the US, analysts deemed the move of investors as a temporary play wherein large scale investors buy thousands of discounted properties which are foreclosed during the worst housing crash. These homes are then refurbished by the investors and turned them into attractive singe family rental homes. Once the prices of the property sector will recover, these investors will surely make a hefty profit from this investment. Today, it is reported that the housing sector is already recovering though much slower than expected. The foreclosure among homes is way down and that housing prices have steadily risen but still these investors are not yet selling.
Figures have shown that these investors are buying more and more properties and they are buying new ones. According to the CEO of Starwood Residential Trust, the market is seeing a very compelling year in the property business. He said that home builders are the next frontier when it comes to institutional investors. From their viewpoint, this move by the investors is to their advantage as they have a brand new home which usually has a warranty. They can also customize the home’s floor plans that will work well for the business.
Starwood Waypoint has now accumulated at least 16,000 single family home rentals since it was launched in the real estate property business about seven years ago. The vast majority of their assets were really foreclosures. Today, the company has purchased as much as 200 brand new properties from home builders and these homes have an average price of about $180,000. These brand new homes represent around 5 percent of the portfolio of REIT.
According to a research at Meyers Research, the institutional capital is looking at the turn of events very carefully because most investors believe that there is particularly a long term hold and that the yield will be even greater when prices appreciate in the future.