Just twenty percent of the nation’s 8.7 million single family rental properties are managed by professionals, according to Steve Cook of Real Estate Economy Watch. Individual owner/investors do the bulk of the rest. That led to just 35 percent of those rentals turning a profit. Owners, according to Cook, may be spending too much time and money on maintenance.
Jacobs’ group, however, is very profitable, with 8-9 percent annual returns on his properties. His renters stay, he says, with a 65-70 percent re-up rate. He credits good management and hopes, someday, that his long-term renters will become buyers. Unfortunately, that may take a while, as so many of them need to rebuild their credit.
“Our tenants are not apartment dwellers. They're dual income families, probably lost a house or gave up a house voluntarily. They want to get their lives in order, stabilized,” says Jacobs. “Once they've done that, they then can become buyers of those properties down the road.”
Empire Group has already passed the first round of pre-qualification for the FHFA REO to Rent program and is hoping to clear the second round and start bidding on bulk properties in the next few weeks.
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