The Surprising Profile of the Real Estate Investor

Over 10% of all residential homes are purchased by investors,and that number continues to rise. Who are these investors?

Many have speculated that the large institutional conglomeratessuch as Blackstone, American Homes 4 Rent, and Colony Starwooddominate investor purchases. However, a special report on investorhome buying by CoreLogic, Don’tCall it a Comeback: Housing Investors Have Been Here for Years,shows this is not the case.

RalphMcLaughlin, CoreLogic’s Deputy ChiefEconomist and author of the report, explained hisfindings at the recent National Association of Real EstateEditors conference in Austin:

“Investor buying activity in the U.S. is at recordhighs. And our records go back confidently, about 20years…

What’s going on and why? Well, it turns out,it’s not the big institutional guys that are leading theincrease in home buying. It’s actually the smaller guys.It’s those that have bought between one and ten propertiesover this 20-year period, they’re the ones that are reallyleading the increase in investor home buying.”

Here is the breakdown of the percentage of purchasers by type ofinvestor over the last six years according to the report:

As the graph shows, the percentage of “Mom &Pop” investors is currently dominating the number of homespurchased by investors, as the percentage of homes purchased byboth professional and institutional investors is falling.

Bottom Line

Most houses purchased by an investor are bought by smallinvestors looking to diversify their financial portfolio by addinga real estate component. If you are investing in real estate aseither a landlord or someone who fixes-up and flips the house,let’s chat about the ways you can build or liquidate yourcurrent portfolio of properties.