Think-Realty-Magazine-July-2020

EVENWITHALLTHE RECENTUPHEAVAL, SFR INVESTING STILLMAKES SENSE INTHE LONG RUN. ”

—BRUCE MCNEILAGE

the economy begins its trek back to prosperity, lenders will swing back toward more easily obtained financing.

Even with all the recent upheaval, SFR investing still makes sense in the long run. The acceleration in the per- centage of potential renters creates a ready-made market to help fill homes and build cashflow. Strong home values make SFR a sound long-term investment — even if homes have a slight dip in short-term values, a positive cashflow from rental income will help investors build equity. In the short-term, tighter lending strategies will likely keep some investors on the sideline. However, shopping for deals outside of traditional banks at credit unions or smaller community banks could give investors the terms they need to strike a deal. And, of course, some investors still will be willing to take a 70 percent LTC/LTV deal. Looking at SFR trends through this lense rather than throwing your hands in the air and accepting something is the “New Normal” shows there is still a tremendous upside. Yes, we are going through some crazy times. But, that doesn’t mean that investors should just roll over. Learn to analyze and manage change and there is still money to be made. •

HOMESARE STILLAGOOD INVESTMENT Finally, home values have held up nicely in the wake of COVID-19 in many markets across the country. In Detroit, the average sale price was up 8.5 percent from April 2019 to April 2020. In Austin, Texas, the average sale price was up 3.2 percent and in Atlanta the average sale price was up 8.9 percent. That’s good news for SFR investors, as their home portfolios are most likely still holding their values. Rent collection fears still exist, but according to the National Association of Residential Property Managers, “Over 60 percent of property managers reported that 91 to 100 percent of their tenants had paid May’s rent in full and on-time.” This means overall rental cashflow is likely still positive for most investors. WHATTHIS MEANS TO THE SFRWORLD Analyzing each phase of any business against these criteria — What Is Accelerated, What Is Temporary and What Is Unchanged — gives people an objective meth- od for evaluating change. We WILL go through change, pandemic or not.

Bruce McNeilage is the managingmember and a co-founder of Kinloch Partners and a partner in Harpeth Development.. He is a passionate advocate for housing affordability and homeownership, and invests heavily in Nashville, Tennessee, as well as throughout the southeast. Learnmore about his projects, including single-family built-to-rent

communities and the Solo East and North condominiumprojects at www. Kinlochpartners.net.

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