A recent survey by Visio Lending found that real estate investors are optimistic about the next year of investing.
With home prices rising and foreclosures decreasing, investors are adjusting their strategies for buying investment properties by searching further from home and at higher price brackets, the survey revealed.
Of the nearly 700 respondents, 34 percent said they are broadening their searches for properties outside their home states, with Florida being the top state for investing, chosen by 67 percent of investors who searched multiple states.
Other top states for investing include Georgia (43 percent), Texas (36 percent), North Carolina (33 percent), South Carolina (30 percent) and Tennessee (29 percent).
“Although investment properties are not as abundant as in previous years, investors are finding new and better ways to flip more houses and grow their rental portfolios,” explains Visio CEO Jeff Ball. “We lend exclusively to residential investors, so we see the challenges that they face in responding to rapid market changes. The results of our survey support our experience that investors are smart, resilient and resourceful as they embrace the rebounding property market.”
Compared with last year’s report, we found that 63 percent more investors are considering properties over the $200,000 threshold, while interest in sub-$40,000 deals has decreased. Additionally, investors plan to mix their strategies more aggressively, doing both fix-and-flip deals and building up rental portfolios.
Not only do investors plan to mix flipping and landlording, but they are also interested in increasing the time they dedicate to investing. Although the majority of investors now are part time (56%), most want to make investing their full-time jobs.
“This is a market ripe for rapid growth. Eighty-three percent of our part-time investors expressed interest in going full time, and are seeking fast, simple and dependable financing in order to do so. Of the full-time investors, more than 90 percent are looking to accelerate their businesses with more options for working capital,” Ball said. “Each year, our survey continues to tell us that investors want to build their small businesses, and are looking for the tools they need to succeed.”
And what tools did respondents say they needed most? Results indicate that money is a major factor that holds them back. Of the part-time investors, 58 percent cited a lack of money as a major deterrent to their goal of becoming full time, while 35 percent said they lacked access to lender capital.
The report indicated that minorities are increasingly entering the market, with African Americans now making up 22 percent of the investor class, up from 15 percent last year.
With more than 14 million single-family rental properties in the Unites States, the residential real estate investment market is a multi-billion dollar investor opportunity annually, but remains highly fragmented, and therefore, little studied.
