REITs: Investing in Single Family Homes

Real Estate Investment Trust (REIT) companies will be investing in more 100k+ single family homes in 2012.

"For the first time you will see billions of dollars coming in from publicly traded and non-publicly traded REIT's into single family homes." predicts Greg Rand, CEO of OwnAmerica.com. "It's the most significant trend in residential real estate for 2012."

A Real Estate Investment Trust company uses pooled money from investors to invest in real estate. Usually REIT's invest in commercial real estate and multifamily projects but, in today's market, the demand for rentals is going up along with rents and apartment complex values. Single family homes are a better value plus they are more "liquid" in terms of being able to sell them easier than a huge apartment complex.

"REIT's have been in existence for decades, and there are exactly none that are invested in the single family home sector." explains Rand. But the industry is all abuzz with this new trend. "The main things holding REITs back are (a) some laws and regulations that need to be ironed out, and (b) a field operation that can select, acquire, rehab, lease and manage the portfolio."

Rand predicts that real estate companies and individual agents who ready themselves for this next trend will see their business grow dramatically in the next few years as the competition among residential REITs heats up.

"This is bigger than new construction. Bigger than corporate relo. Bigger even than distressed property. This is billions in transaction volume. Do you think it is worth preparing for? If you are reading this in January 2012 and take action, you are ahead of the curve." says Rand.

Read Rand's blog at OwnAmerica.com.

Watch Rand on Fox Business News

photo credit: Jonathan D. Blundell