Housing Market led recession of 2007-2009
While the housing market struggles with startups the rental market is booming. Investors can still benefit by investing in companies that are taking the lead of the current marketing slump.
Blackstone (NYSE: BX) MetLife (NYSE:MET)
These companies have been taking advantage of the fall in housing and investing in rental property through real estate investment trust or REITs. Rental market has seen vacancy rates go down to the lowest in years. While banks are making it harder for consumers to qualify for mortgages those consumers are flocking to rent homes.
MetLife focuses on apartment buildings. MetLife chooses a long-term investment model. For example selling the Peter Cooper Village-Stuyvesant Town in New York, which was purchased in 1940 in 2006 for $5.4 billion.
Blackstone used the drop in homeownership to build a powerhouse portfolio purchasing approximately 40,000 single-family homes as rental property and becoming the largest single-family property owner in the country. The company is also issuing bonds backed by rents to provide debt relief.
American Homes 4 Rent (NYSE:AMH)
This stock I purchased last year at $15.99 as IPO (Initial Public Offering), in May it’s selling around $17.42 owns around 20,000 single-family homes. They have purchased homes in middle to upper housing market. They have concentrated their efforts in certain states and are not purchasing fixer-uppers.
I’m a landlord and I’ve seen a boom in renting our property. The banks have tightened its lending policies on consumers making it harder for them to purchase a home they have to rent. For landlord the supply of quality applicants and renters have increased. I have noticed there are more demands placed on landlord to address the maintenance of their buildings and government subsidiaries have be limited.
Blackstone, American Homes 4 Rent and MetLife are absorbing the need of these renters. As an investor you might not want to purchase rental property but investigating and investing in these stocks, you can reap some of the benefits of the marketplace. I got my first dividend check this year from American Homes 4 Rent and I expect many more.