There are many strategies and classes within real estate investing. Whether it’s residential, commercial, house flipping, REITs, debt or equity, there are plenty of options in real estate. New Street’s business model is focused on investing in single family rental properties. We believe single family rental homes provide a great opportunity to purchase, renovate, rent, and add value to hold long-term and gain consistent cash flow and appreciation with limited risk.
Investing in single-family rental properties can offer a number of benefits, including:
- Passive Income: One of the biggest benefits of single-family rental properties is the potential for passive income. By collecting rent from tenants, investors can generate a steady stream of income without having to actively manage the property.
- Appreciation: Real estate prices tend to appreciate over time, and single-family rental properties are no exception. This can lead to significant gains for investors who hold onto their properties for the long-term.
- Tax Benefits: Owning rental property can provide investors with significant tax benefits, including deductions for mortgage interest, property taxes, maintenance, and repairs. Additionally, the depreciation of the property can be used to offset rental income for tax purposes.
- Diversification: Investing in single-family rental properties can provide investors with an opportunity to diversify their investment portfolio, potentially reducing their overall risk and helping to stabilize their financial portfolio.
- Stable Demand: There is always a need for housing, making residential real estate investments a relatively stable investment option.
- Liquidity: Liquidity refers to the ease with which one can convert an asset to cash. While real estate is an illiquid asset, meaning the process to sell real estate can be complex and take a long time. Residential real estate, specifically single family homes, are far easier to trade than commercial real estate or multi-family properties.
It is important to keep in mind that owning rental properties can also come with challenges, such as the need for regular maintenance, the cost of repairs, and the possibility of vacancies. New Street offers investors the benefits of passive income generation while offloading and managing the complexities rental property ownership.
Why Single Family Properties?
At New Street, we see significant investment opportunities in single-family homes. Over the last decade, we have experienced the US home and rental values hit all-time highs. There is strong demand, but insufficient supply. The US is facing a housing supply crisis. According to a 2019 Fannie Mae study, a good estimate of the shortage of housing units for sale or rent was 3.8 million*. The pandemic then added a surge in home buyer demand and material and labor shortage. This added more upwards market pressure, as we experienced a surge in rents and home prices since 2020.
The undersupply of single-family homes paired with increased demand for home ownership, provides a great investment opportunity. Investors can realize the benefits of stable cash flow, home appreciation, and relatively lower risk compared to multi-family or commercial real estate.
The New Street Difference
At New Street, we specialize in single-family rental properties. We have an established process for identifying and acquiring properties designed to maximize investors return and minimize risk over the long-term. See our Investment Process article for more details.
*https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage