InvestingMarkets & Economy

Uptick in residential real estate investing in 2015: Part 2

A closer look at investment trends and what you need to invest

A healthier real estate market in 2015 has driven the enthusiasm and optimism of investors and encouraged them to buy more, which is contributing to sustained market growth.

To accelerate business growth, here’s what investors need to do:

Working capital

A large segment of full-time investors is held back by a scarcity of capital and deals of their choice. Almost 44 percent of residential investors carry out work on a full-time basis while 56 percent do so on a part-time basis.

A recent survey asked people belonging to both these categories to name two or three things that would help them grow their businesses.

A majority — 92 percent of full-time investors — said better access to cheaper loans; 38 percent said the ability to find better deals, and 20 percent said faster loan origination would help them significantly.

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Help wanted

A trend to note was that more than 20 percent said that they could grow faster if they had more high-quality employees and contractors. Some even mentioned that they were desperately looking for more competent workers.

Career investors

Part-time residential investors don’t invest full-time due to any of these four reasons:

  • Lack of money to do more deals – 58 percent
  • Lack of access to lender capital to do more deals – 35 percent
  • Lack of quality deals – 19 percent
  • No desire to be a full-time investor – 17 percent

Interestingly, 83 percent of part-time investors expressed interest in going full-time if they had access to quality deals and more funding.

Real estate investing strategy

The breakdown in investing strategy indicated that full-timers were found to be much more likely to focus on flipping houses (44 percent) than their part-time counterparts (39 percent). Compared to full-timers (43 percent), a slightly higher percentage of part-timers (52 percent) were found to rely on rental properties.

 

Investors Improvements Comparison 2013 - 2015

Investors Improvements Comparison 2013 – 2015

 

Rules of real estate investing

One cannot promptly make up his or her mind to invest in real estate. There are a few factors that one must think out early in the process and a few others to keep in mind. Here are a few rules that might help:

  • There should be an action plan ready before you step into any investment.
  • You should grab the appropriate guidance to make sure you are going in the right direction.
  • Making up your mind is necessary. You can’t row in two boats at a time.
  • Study of potential losses is necessary — it will help you avoid them.
  • Opt for a location that is in demand. This place is where you will gain maximum profits.

Compared to 2013 when only 50 percent of investors pursued a non-exclusive strategy (mixing both flip and rental properties), 2014 saw the figures increase slightly to 58 percent.

However, it was eventually found that the investors didn’t follow multiple strategies as they had planned, with 50 percent reporting non-exclusive strategies in 2014, which was the same as in 2013.

But investors think they might give their businesses a boost this year if they expand their investment strategies. In fact, as many as 59 percent are planning to pursue non-exclusive strategies though the actual percentage could remain around 50 percent in 2015, just like the previous two years. Still, it shows that upbeat mood of the retail investors.

Here is the monthly real estate market report for May 2015. Experts believe that it’s the right time for residential real estate investors to grab the opportunity that the healthier housing market is likely to bring their way.

Read “Uptick in residential real estate investing in 2015: Part 1.”

Cheryl Jensen is a writer at Total Atlanta Realty. You can follow her on Twitter or Facebook.

Email Cheryl Jensen.