Over the last few years, institutional investors, particularly hedge funds and private equity firms, have been actively purchasing large numbers of single-family homes in various cities throughout the United States. Obviously, hedge fund managers don’t occupy these homes, but the companies rent these properties out to tenants. This investment strategy offers fairly generous cash flow potential. However, there has been a recent surge in individual investors engaging in this particular method of real estate investment as well. In fact, there are a variety of real estate investment options for anyone, not just companies or individuals with access to a great deal of capital.
There are even networks of real estate investors offering franchise opportunities to make investments in single-family homes, such as the “we buy ugly homes” group. In addition, there are websites that feature listings with promising cash flow potential, and they analyze and provide other important investment measures too. Some of the resources available specifically target small investors to assist them with the financing and purchasing process. The best aspect of these real estate investment resources is that they are available on a national scale, so pretty much anyone anywhere can access real estate investments in local or distant markets. Interestingly, single-family homes constitute the fastest-growing sector of the current stock of rentals nationally. In fact, rentals of single-family homes represent approximately one-third of the total rental market.
We must admit that it’s a bit hard to estimate how applicable these numbers are in the Miami real estate market. Even though plenty of individuals and families rent single-family homes all throughout South Florida, condominiums represent a large portion of the rental market, particularly in the coastal areas. Regardless, as developments surge along the coast and in the neighborhoods surrounding Brickell and the Downtown area, there is also a fair amount of construction and further expansion into the western part of Miami. In addition to the new construction of town homes, condominiums, and single-family residences, commercial real estate out there continues to be developed at a rapid pace. As a result, there are significant opportunities for small and large investors to obtain single-family rental properties in and around most areas of greater Miami.