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Baton Rouge Investment Properties: Look Beyond the Local Market

Small investors may be scouring the local market for Baton Rouge investment properties, including single family rentals (SFRs). Indeed, a considerable majority of single family rentals are bought/sold by small investors.  Yet, this small scale industry commenced a transformation following the 2008 housing crisis when institutional investors (those who purchase/sell more than ten houses in a year) and foreign investors moved into the market to acquire homes with depressed prices.

Consider this example: a private equity company called the Blackstone Group invested five and a half billion dollars purchasing tens of thousands of SFRs following the sub-prime mortgage crisis.  Foreign investors boosted their investments in American SFRs by more than 100 billion dollars in 2016.  Additionally, Real Estate Investment Trusts have also expanded in the SFR industry since rental property investment returns have outpaced tame returns from other investments.

These more advanced investors laid the groundwork for a new type of broker to buy/sell SFRs.  Among the most known of these include Investability.com (an ally of Real Property Management franchise offices), VIPhomeshop, OwnAmerica, Roofstock, and others.  Through using their online systems, either a large or small investor is no longer restricted to Baton Rouge investment properties, and can instead look for investment properties in any part of the US based on price, cap rate, geography, and other criteria.  Also, because a property that is already rented is more valuable than one that is not, their listings regularly contain these investment opportunities.

While the arrival of institutional and foreign purchasers might have led brokers to build new systems, the interesting element is that small investors, who have been the drivers of the rental market industry all the time, might be those who ultimately benefit.  The small investor is no longer required to search in just the local market for rental properties. These days an investor can find a large number of properties meeting investment requirements while still comfortably sitting at home.

Are you interested in learning more about our Baton Rouge property management services? Please contact us for details.

 

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