Which is why, even with the volatility of the real estate sector, it remains a great vehicle for investors.
“There’s a significant demand for rental properties,” said Jeffrey Lemieux (pictured), managing director, correspondent lending & investor loans division, at Acra Lending. “That’s primarily due to the continuing housing shortage. Ten percent (10%) of all apartment buildings ever built in the United States had a third bedroom. So, that forces people into single family home ownership, because we’re human beings. We have children, we need a third bedroom.”
Houses are not getting built fast enough to satisfy the demand, he noted. That “really speaks to why it’s continuing to be good for people buying and investing in properties.” Higher interest rates also mean that “fewer people can afford to own a home,” which is “creating even more demand as a result,” Lemieux said. “So, they’re going to need to go to the default solution, which is to rent a home. So, the interest rate environment is really also driving the greater demand for rental properties.”
Rising interest rates also means that fewer people may qualify for a mortgage, which is where private lenders like Acra come in.
“Acra is a leader in the private lending sector,” said Lemieux. “We have a very strong balance sheet and we’re well capitalized. That is paramount in order for a company to be there for its customers. You’ve got to be well capitalized, particularly in the private lending space.”
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