For the first time in Florida history, real estate investment firms are investing in the single-family home rental market, replacing so-called “condo vulture” investors.
Private equity funds, hedge funds, and REITs have purchased at least 4,000 single-family homes for the purpose of renting them out. These companies pay cash for a cluster of foreclosed or bank-owned homes, rent them out for a couple years, and then sell them for a profit. This business model works because home prices are low, rent prices are high, and the market is expected to bounce back in a couple years.
These homes are a much better investment than condos because in addition to the eventual payoff when the property is sold, single-family home investors can also make a profit while renting out the homes.
Previously, it was almost impossible to buy homes in clusters because they went on the market randomly and were usually spread out over a wide geographic location. This is no longer the case because the Federal Housing Finance Agency is now selling foreclosed homes in bundles.
Investors also have the option of hiring a local property management company to keep up with maintenance, rent collection and more, making the process even easier.
If you have the venture capital, it is a great time to start a Florida real estate investment company. For foreign investors, this could also be a path to a visa if the investment is sufficient and will create jobs.