The 2024 Baselane Real Estate Investor Survey reveals optimism among investors despite rising costs. Key takeaways include:
- 81% of investors plan to grow their portfolios within two years.
- Investors are less worried about vacancies, focusing on financing costs (35%) and home prices (33%).
- 22% faced rental insurance hikes of 11% or more, and 50% saw property tax increases of over 6%.
- Conventional loans remain the top financing option (44%).
Investors Are Growing Portfolios But Skeptical
No, the sky is not falling on real estate investors, and they are not waving the white flag. I agree that transactions may be down, but that doesn’t mean that investor sentiment is changing. Over 81% of investors are intending to grow their portfolio over the next two years, according to a recent investor survey by Baselane.
After reading through the survey, it became clear that investors are optimistic but cautious when underwriting deals. Indeed, 17% of investors felt comfortable with their portfolio and did not feel the need to expand anytime soon.
As rental demand stays steady, vacancy concerns have dwindled, as over 52% of investors are less or much less concerned about them than in 2023.
Affordability Is at the Forefront
Getting tenants in does not seem to be the issue, but financing and rising home prices that rental rates can’t keep up with are. According to the National Association of Realtors (NAR), the median home price for July 2024 has risen 4.2% year over year (YoY) to a whopping $422,600. The explosion over the last four years is quite staggering when you consider most sales during that time were made with interest rates below 3%.
Potential sellers’ mortgages are at their pandemic interest rates, and so they are locked in and not letting go, understandably. That same reason leaves buyers on the sidelines waiting, hopefully, for rates to drop.
Data from the U.S. Census Bureau and the U.S. Department of Housing and…