Investment Trends: Luxury Real Estate Rentals

We have got to love 2015 and Luxury Real Estate Rentals!
Doesn’t the days of real estate “Recessions” seem very far away?  
Love 2015

Last week I sold one of my luxury real estate rentals. The property was profitable so why did I sell? Partly diversification and partly because I could. Every once in a while it is exciting to see how profitable real estate investments can be over the long term and not just on the month to month positive income level. It really was fun to list a rental for sale fully furnished and with a tenant included. The property was sold for over asking, no contingencies, 14 day close and all cash.  

Yes, sometimes it is just fun to sell because you can and see all that cash in your checking account and spend some time contemplating what to invest in next…. 

Here at CHBO we work a lot with investors who are interested in investing in luxury real estate rentals.

Did you know… 18% of CHBO property owners plan on buying more investment rentals in 2015!  and 24% plan on buying more investments in the next 2-3 years!

CHBO Annual Corporate Housing Real Estate Report

New trend alert… What’s interesting, though, is that people who plan on buying real estate dropped in 2014, after several years of that number trending up. When respondents were asked whether they plan on buying more investment real estate, 42% said they “don’t know.” This response is at an all-time high, and it’s a 6% increase over last year. One possible reason for this answer may be the lack of value-priced real estate available on the market today. We believe investors may be sitting on the sidelines because they can’t find good deals.

In previous years, we assumed the undecided would change their answers to “yes” as the real estate market improved. However, this “don’t know” number has held relatively consistent over the last five years.

For the fifth year in a row, there were more “Yes, I plan on buying more real estate” responses (44%) than “No, I’m done with real estate” responses (13%). Over the last five years, the biggest trend in this question has been the steady decrease in the “No, I’m done with real estate” responses. Those responses have dropped from 27% in 2010 to only 13% in 2014.

Do you plan on buying more investment real estate?
Answer Options 2014 Responses 2013 Responses 2012 Responses 2011 Responses 2010 Responses
Yes, this year 18% 23% 19% 17% 15%
Yes, within 2-3 years 24% 22% 21% 15% 18%
Yes, when the banks lend* 2% 4% 4% 8% n/a
No, I’m done 13% 15% 17% 22% 27%
Don’t know 42% 36% 38% 39% 40%

Real Estate Investment graph

 

 

 

 

Read more Blogs about Luxury Real Estate Investment and Corporate Housing Trends in the CHBO Annual Report…

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