Inman Connect is LIVE Aug. 8-10! Join us for impactful interviews, cutting-edge conversations and networking with thousands of real estate pros. Get valuable takeaways to thrive in a rapidly shifting market. Can’t come to Vegas? Register now for a virtual ticket.
The easy money in real estate investing is long gone, but investors and agents interested in earning money through rentals should think about what they can earn over the long term, according to a panel of executives at Inman Connect Las Vegas Wednesday.
“I encourage people to take a long view when it comes to single-family rentals,” said Gary Beasley, CEO of Roofstock, a company that allows people to buy shares in single-family homes. “It’s a phenomenal asset class.”
Beasley spoke alongside Doug Brien, CEO of Mynd; and Austin Allison, CEO of Pacaso; at a discussion that focused on the outlook for real estate investing in the coming months.
Beasley noted investors can generate immediate cash flow through monthly rent, plus the long-term benefits of equity.
He also pointed out agents can benefit from selling to investors or buying rentals themselves, whether short- or long term.
“We’re encouraging people to think beyond this point of the interest rate cycle,” Beasley said. “Buy good assets and over time you can still generate really nice returns. It’s just the easy money is gone.”
Gary Beasley, CEO of the single-family rental investment platform Roofstock, encouraged investors to take the long view on rentals at Inman Connect Las Vegas on Aug. 9. Image by AJ Canaria
Over the near term, investors face a rocky road caused by high-interest rates and stubbornly high prices for most real estate assets.
“As you look at what’s happening now and where rates are likely to be and the likelihood of a recession, our view is that next year is going to end up looking a lot like this year,” Brien said.
Mynd helps investors find properties to buy in 25 markets across the U.S. and then offers services to help manage those properties.
Opportunities to make money on real estate emerge during downturns for investors who are ready, the panel said.
“Focus on what you love, whether it’s the single-family rental space, the multifamily space, the second home space that we’re in,” Allison said. “There’s just so much opportunity out there. Profit follows the passion.”
Investors who are impacted by rates might earn higher returns over the short term by investing elsewhere. But Beasley and Brien said the baked-in advantages around single-family rentals and small apartment buildings make it worth a look.
“When you compare housing to other real estate asset classes it’s so advantaged,” Beasley said. “How would you like to be an office owner or retail?”
Office vacancy rates have spiked to record highs as employees continue to eschew returning to the office full time. That’s resulted in building values falling by as much as 50 percent. Meanwhile, more than $1 trillion in commercial real estate loans are coming due over the next year-and-a-half.
The apartment market might also see distress as a result of falling values due to high-interest rates, rising vacancy and falling prices. That opens up opportunities for real estate agents to invest themselves, Beasley said.
“There’s going to be some distress on the multifamily side” Beasley added, “and some of those are smaller.”
Get Inman’s Property Portfolio Newsletter delivered right to your inbox. A weekly roundup of news that real estate investors need to stay on top, delivered every Tuesday. Click here to subscribe.
