Tyler Laprade is a software developer in Manhattan — and a landlord in Ohio and Alabama. The 24-year-old was already invested in the stock market, but he wanted to diversify, as well as receive steady monthly income from his investments.
"The market's good sometimes, it's bad sometimes, but rental income is consistent. Each month you get the same amount from the tenant. You don't have to worry about how much it's going to be, so there is less variation from month to month," said Laprade.
But Laprade couldn't invest in his pricey backyard because the cost of getting in was too high compared to the returns. He wanted to purchase homes in the $50,000 to $100,000 range, which are few and far between in the New York City area. So he turned to a company called HomeUnion for help.
"I'm a young, working professional. I don't have time to fly all over the country looking at hundreds of houses, seeing which has the best cash flow," he said. "HomeUnion takes the stress out of it for me."
Irvine, California-based HomeUnion was founded in 2009, during the height of the foreclosure crisis, as something of a middleman for individual real estate investors looking to become landlords. It helped smaller investors to compete with big institutional firms that were scooping up distressed properties across the nation by the thousands and creating a whole new asset class of single-family rentals.