CHARLOTTE, N.C., Dec. 6, 2016 /PRNewswire/ -- A pioneer in bringing technology and services to the institutional Single-Family Rental (SFR) market, OwnAmerica CEO Greg Rand spoke yesterday at the IMN 5th Annual SFR Investment Forum in Phoenix. He shared his views on what the Trump Administration will mean for the SFR market, and how changing demographics and evolving sales practices are changing the market.
Highlights of Rand's presentation:
How President Trump will impact the housing market?
The housing market thrives on optimism.
That announcement we saw last week with Carrier keeping 1,000 jobs in Indiana is going to become a regular occurrence.
Why? Because American corporations have gotten pretty good at buttering up politicians in Washington. The way they usually do it is by writing a check to their campaigns. That won't work anymore.
The way to butter up President Trump is to give him a press conference, a success to announce. A factory saved, returned, or opened. A failing company acquired and jobs saved.
This will create a drumbeat of optimism that will translate into confidence.
I predict the homeownership rate will begin a sustained upward trend in 2017 and beyond.
What would a HUD Secretary Ben Carson do for housing?
The biggest opportunity to boost housing at the federal level right now is for FHA to adapt their multi-family lending product to be friendly to single-family investors. I believe that proposal will get legs with Ben Carson in charge of HUD.
Why? If you read his book, you will understand that what motivates and animates Ben Carson is education. He will see the home as the place kids do their homework and read. He will recognize the impact housing can have on education.
He will instinctively know that, to a kid, a home is more of a home when it's a house. Expanding access to capital for investors of Single-Family Rentals will make sense to him and he will green light the policy.
Demographics are changing. Millennials don't want homeownership. Is this good for the Single-Family Rental Market or bad for the housing market overall?
Millennials don't want homeownership, but why? Is it because they desire the lifestyle benefits of flexibility and mobility of renting, or because they are scared by the housing market, having grown up into adulthood during a housing crisis?
The answer is lifestyle. Research by Better Homes and Gardens Real Estate reveals something we've already seen anecdotally: Millennials are renting where they live and buying investment property. They are not scared of the housing market. They just don't want to be tied down yet.
Is a single-family home's value different if it's sold vacant to a home buyer than if it's sold occupied to an investor? If so, why and by how much?
Yes. Right now there is a 9% discount from retail market value when it's an occupied rental property. However, a landlord with an occupied rental property will incur "friction costs" of 8-12% of the value if they vacate that rental home in order to sell it. Friction costs include renovation costs, and downtime to renovate and find a tenant.
We have seen the discount go from 13% in 2014, to 9% today, and the gap continues to close. Why? Because the market for occupied rentals is becoming more efficient. We are creating competitive pressure for buyers and it's driving prices up. By 2018, market value for occupied rentals will be the same as for vacant homes.
Founded in 2010, OwnAmerica has been part of the effort to institutionalize Single Family Rental, America's largest asset class. The company creates tools and online markets for institutions to buy and sell performing SFR properties, and has trained and certified more than 4,000 real estate agents to service SFR clients. Now those tools, technologies and professional services are being offered to investors at every level. OwnAmerica.com now offers free portfolio analysis to SFR owners, and a private marketplace to buy and sell occupied single family rental homes.
CozComm Public Relations
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ownamerica-ceo-addresses-industry-group-on-outlook-of-single-family-market-under-a-trump-administration-300373636.html