Updated: Jan 28
The Wall Street Journal published an article about how a group of real estate companies are reducing the complexity and daunting nature of investing in income property.
On January 7th, 2020, Peter Grant an online article, “Point, Click, Own: Firms Transform How to Buy Investment Homes,” which outlines how the complex and daunting process of buying investment properties, normally reserved for the wealthy, is changing thanks to a group of real estate startups and turnkey companies.
Grant explains that these companies allow investors to grow personal portfolios, “relatively hassle-free,” without the requirement of ever stepping foot in the property. They can acquire and establish management, “with a few clicks of a mouse or taps on the phone.”
The article breaks up the topic into three different types of categories: 1. Turnkey Real Estate, 2. Online Marketplaces, and 3. Online Funds.
JWB Real Estate Capital and REI Nation LLC are mentioned in the article as companies in the growing turnkey business, which explains their process as buying, upgrading, leasing, and then selling them to buyers all over the country.
Additionally, the article mentions that the growing nature of these businesses shows how smaller investors are seeking out new creative alternatives while interest rates remaining low make bondholding less attractive. Also, the record stock market is making some weary for a correction.
To BiggerPockets members, this does not come as a huge surprise, because of the popularity of the turnkey industry over the platform, but to the average person, this could be a much deserved boost of credibility for the investment channel, that has been known to be “alternative” or “too good to be true.” It is great publicity for turnkey companies, turnkey company owners, such as myself, and to investors wanting a bit more convincing to be comfortable exploring this strategy for their portfolios.
“...The appeal of steady returns from rental properties is attracting a crowd, especially as rents rise throughout the U.S.”
REI sold around 1000 properties in 8 markets. Chris Clothier, of REI, stated, “‘There are investors that want to swing hammers and slap the paint themselves, but there are way more investors who want to be passive.’”
The article gives an example of a turnkey client, Billy Maloney, that stated, “‘I’m….thinking like an investor where your money goes further out of state.’”
In conclusion, this article exemplifies the growing popularity, of not only owning rental property, but owning rental property out of state to boost returns. It shows the growing comfortability level of owning out of state property. It also shows how, as the demand grows, there are great ways to invest money regardless of your income level or location. But, it is important for investors to lock down their strategies, not over-extend, perform their due diligence, and be aware of the risks.