Share of homes bought by investors continues to rise as rents for single-family homes skyrocket

Real estate investors were responsible for 18.2% of homes bought in the United States in the third quarter of this year – a record share, according to Redfin.

This new all-time high was up from a revised share of 16.1% in the second quarter of 2021 and 11.2% in the third quarter of 2020. The year-over-year jump in the third quarter of 2021 was the second largest annualized increase never recorded by Rougefin. And the total number of homes bought by investors in the third quarter – 90,215 – is also a new record, as is the volume of $ 63.6 billion spent by investors to buy those homes, from a revised total of 58. 8 billion dollars in the second quarter of 2021 and against 35.7 billion dollars. in the third quarter of 2020.

With US home prices continuing to soar, the typical purchase price of a home purchased by an investor in the third quarter of 2021 was $ 438,770, up 5.3% year on year on the other.

You can buy a high-end laptop and matching new cell phone, or you can pay a month’s rent for a single-family home in Los Angeles. It’s not much better for future renters of single-family homes in California, according to a new study. In Ventura or Carlsbad, the median rents for single-family homes are $ 4,250, and in Santa Clara and Berkeley, the median rents for single-family homes were $ 4,225 and $ 4,200, respectively.

That’s almost as much as it costs to deliver a newborn baby, on average, even with employer-provided health insurance.

The median rent for a single-family home in Cape Coral-Fort Myers, Florida was $ 1,800 in March 2020, but by October of this year it had doubled to $ 3,600. Florida, overall, saw the biggest rent increases during the pandemic.

As the moratoriums on evictions expire, studies predict that rents for single-family homes will continue to rise. Enforcement of the Centers for Disease Control’s eviction moratorium, now expired, was initially inconsistent, and in some areas there have been few controls over tenant turnover and rent increases, even during the pandemic.

“Rising house prices fueled by an intense housing shortage has created opportunities for investors to reap big profits,” said Sheharyar Bokhari, senior economist at Redfin. “These same factors have driven more Americans to rent, which also creates opportunities for investors, as investors typically turn the homes they buy into rentals and can now charge higher rents.” Just over three in four homes (76.8%) bought by investors were paid off in cash in the third quarter, highlighting another challenge the investor-rich market has posed for repeat buyers.

If you are looking to take advantage of the high rental market, Griffin Funding Bayside has the loan program for you. A debt service coverage ratio (DSCR) ready is an option that allows you to put as little as 20% down, without providing any of your personal income tax or tax returns.

The debt service coverage ratio is a ratio of a property’s annual net operating income to its annual mortgage debt, including principal, interest, and all associated fees. Lenders use DSCR to analyze the amount of a loan that can be supported by income from the property, as well as to determine the amount of income coverage for a specific loan amount.

A DSCR loan is available for both new and seasoned investors. There is no limit to the number of properties you can acquire to develop your real estate portfolio, including long or short term rentals. Start or continue to build your real estate investment portfolio without the need for a private hard money loan. Our DSCR loans are a great mortgage option to help you generate residual income without mortgage issues getting in your way.

Want to know more about our non-QM loans before you apply? Contact us online or call us at 619-393-8458 to discuss.

Griffin Funding Bayside offers DSCR loans in the following countries: Arizona, California, Colorado, Florida, Georgia, Hawaii, Idaho, Maryland, Michigan, Montana, Tennessee, Texas, Virginia and Washington!

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