2015 Residential Real Estate Investor Report

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    t h e a n n u a l r e s i d e n t i a l r e a l e s t a t e

    I N V E S T O R R E P O R T

  • Each year, leading residential real estate lender Visio Financial

    Services conducts a survey of the residential investors in their

    database to better understand their customers needs, as well as to

    track growing trends in the ever-changing real estate market.

    With more than 14 million single-family rental properties in the

    United States, the residential real estate investment market is a

    multi-billion dollar investor opportunity annually. Further, it is

    highly fragmented, with 68% of investors owning fewer than seven

    properties. Despite this markets size, the fragmentation has meant

    very little analysis of this space.

    Visio Financial, in business since 2011, has originated more than

    2,800 loans to investors exclusively, yielding a deep understanding

    of the real estate investing space.

    Thanks to Visios market knowledge and sizable database, they

    conduct an annual survey of residential investors at the start of

    each year. Real estate investors, whether they own two properties

    or 200, share their experience and plans, giving valuable insight

    into the residential real estate market. Visio provides the resulting

    Annual Residential Real Estate Investor Report to investors, lenders,

    analysts and anyone else interested in this massive market.

    t h e a n n u a l r e s i d e n t i a l r e a l e s t a t e

    I N V E S T O R R E P O R T

  • Investors Adapt to a Healthier Market

    Investment Portfolio Growth: 49% of investors are planning on

    buying four or more houses in 2015, compared to the 25% who

    actually bought four or more in 2014.

    Higher Price Bands: 63% more investors are considering

    $200K-plus properties than last year, whereas interest in

    sub-$40K properties has decreased.

    Broadened Property Searches: 34% of investors are searching for

    investment property out of their home states as local property

    deals dwindle.

    Market Ripe for Rapid Growth

    Working Capital: 92% of full-time investors believe that access to

    lower-cost loans could grow their businesses faster.

    Help Wanted: More than one-fifth of full-time investors need

    more high-quality employees and contractors in order to sustain

    their growth.

    Career Investors: 83% of part-time investors expressed interest in

    going full time, provided they had more funding and quality deals.

    Minority Growth Sector: African-Americans comprise 22% of the

    investor class, up from 15% in 2014, and significantly higher than

    the general population (13%).

    E X E C U T I V E S U M M A R Y

  • 01. INVESTOR PROFILE

    Who are residential investors?

    full time part time

    44% 56%

    34% 66%

    married widowed divorced/ single other separated

    68%

    2%

    13% 7% 10%

    49% 8% 17% 11% 15%

    2015, Visio Financial Services | www.visiolending.com 3

    Investors mostly male, married

    Compared to national averages, residential investors in the U.S. are more likely to be male,

    married and African-American. At 64%, the percentage of white investors matches the

    national average of 63%, but the proportion of investors who are black far exceeds the

    national racial average of 13%. With the average number of married Americans hovering

    around 50%, investors are 28% more likely to be married. While 68% of male investors are

    married, only 49% of female investors are, with women more likely to be divorced (15% vs. 11%)

    or single (11% vs. 7%). Men were also much more likely to be full-time investors versus women.

    23%77%2.9 people in householdclose to the national average of 2.6

    64% married

    65% employedfull time

    Average age52 years old

    African-Americans make up 22% of the investor

    class (up from 15% last year) versus 13% of the

    general population. This shows an upward trend

    of African-Americans entering the real estate

    investment space.

    22%13%

    total population investorsDemographic highlights

  • 02. INVESTOR INCOME

    How much money are investors actually making?

    2015, Visio Financial Services | www.visiolending.com

    0% 5% 10% 15% 20%

    $0-$25K

    $25K-$50K

    $50K-$75K

    $75K-$100K

    $100K-$125K

    $125K-$150K

    $150K-$175K

    $175K-$200K

    $200K+

    ann

    ual

    ho

    use

    ho

    ld in

    com

    e

    4

    The median investor has a

    total household income of

    $100K-$125K, more than

    twice the median income of

    the average American.

    On average, 36% of totalhousehold (HH) income wasfrom residential investing

    25% of investors make

  • 03. FULL-TIME INVESTORS

    Can full-time investors grow their businesses?

    2015, Visio Financial Services | www.visiolending.com

    cheaper loans

    more/better deals

    more/better contractors & employees

    faster financing

    92%

    38%

    20%

    20%

    5

    Full-time investors held back by capital and scarce deals

    About 44% of residential investors engage in it full time; 56% do so on a part-time basis.

    When asked to name two to three things that would help them grow their businesses, a huge

    majority (92%) of full-time investors cited better access to cheaper loans. The full-timers also

    would like to see better deals (38%) and faster loan origination (20%). Interestingly, slightly

    more than 20% said that if they had more high-quality employees and contractors, they

    would be able to grow faster. Comments like, Desperately need more workers, were not

    uncommon. Looking at the breakdown in investing strategy, full-timers are much more likely

    to focus on flipping houses (44%) than are part-time investors (39%). Relying on rental

    properties is much more preferred by part-timers (52%) than by full-timers (43%).

    What do you most need to accelerate your business? Strategy preference

    full time

    part time

    equal

    prefer flip

    prefer rent

    PT56%

    FT44%

    investors part time

    52%

    39%

    9%

    full time

    43%

    44%

    13%

  • 04. PART-TIME INVESTORS

    Can part-time investors turn full time?

    2015, Visio Financial Services | www.visiolending.com

    Lack of moneyto do more deals

    Lack of accessto lender capitalto do more deals

    Lack ofquality deals

    No desire to be afull-time investor

    58%

    35%

    19%

    17%

    PT56%

    6

    Part-time investors lack capital, deals to go full time

    Part-time residential investors cited a lack of access to capital (35%) and lack of money to do

    more deals (58%) as major impediments to going full time, whereas the full-time investors

    had greater access to capital but bemoaned the cost. Like the full-timers, part-timers also

    saw a need for more quality deals. A small number (17%) of part-timers stated that they have

    no desire to become full-time investors, regardless of deals and capital. We asked part-time

    investors what their full-time jobs were and received a huge diversity of responses, although

    1/5 of them have sales-related jobs. Not surprisingly, jobs that aid in residential investment

    success like construction, finance and real estate were cited by nearly 25% of respondents.

    sales

    construction

    finance

    management

    realtor

    other

    20%

    9%

    8%

    7%

    7%

    49%

    Why are part-time residential investors not full time? What are the full-time jobs of part-time investors?

  • 05. PROPERTY OWNERSHIP

    Will investors' portfolios grow in 2015?

    2015, Visio Financial Services | www.visiolending.com 7

    2013 did buy

    2014 planned to buy

    2014 did buy

    2015 plan to buy

    26% 50% 12% 4% 8%

    5% 57% 18% 8% 12%

    50% 12% 7% 6%25%

    6% 20%45% 12% 17%

    0 1-3 4-6 7-10 11+

    Investor confidence increases in 2015

    Last year, we asked investors how many investment properties they bought in 2013 and how

    many they planned to buy in 2014. Optimism was evident. Even though only 24% bought four

    or more houses in 2013, 38% planned to buy that many in 2014. A year later, we find only 25%

    actually bought the four or more properties they expected to buy, about the same as in 2013.

    And this year? Optimism returns even stronger, with 49% of investors planning to buy at least

    four houses this year. In fact, the number of investors planning to buy eleven or more houses

    saw the most impressive increase this year, from 12% in 2014 to 17% in 2015.

    Investors who bought or plan to buy four or more housesHow many investment properties did you or do you plan to buy? x4

    60%

    50%

    40%

    30%

    20%

    2013 actual 2014 planned 2014 actual 2015 planned

    24% 25%

    38%

    49%

  • 06. INVESTMENT PROPERTY PRICES

    How are investors adapting to a healthier market?

    2015, Visio Financial Services | www.visiolending.com 8

    0% 10% 20% 30% 40% 50%

    $0-$20K

    $20K-$40K

    $40K-$60K

    $60K-$80K

    $80K-$100K

    $100K-$150K

    $150K-$200K

    $200K+

    39%30%

    51%46%

    41%44%

    30%34%

    24%28%

    17%22%

    9%14%

    8%13%

    2014 price ranges considered

    2015 price ranges considered

    In what price ranges will you consider investment properties? Price ra