Has The Build-to-Rent Market Peaked?Jan 20, 2022
"I truly believe that this asset class is still in its infancy stage. There's still plenty of time to take advantage of this great opportunity before it explodes."
What do you guys think of that? Is that true? Has it already exploded? Have investors missed the turn on that?
Steve Olson: I don't I personally don't think so. You need to ask yourself, does the deal make sense?
We go back to that episode we did about what's a good deal. Well, what are you going to do with your capital? I kept thinking that when I was at that conference a couple of weeks ago, a lot of Wall Street types at this build for rent conference in Scottsdale. Compared to what? I mean, you going to put it into stocks, you're going to put it in, I don't know...
Sherida Zenger: Crypto, a CD...
Steve Olson: Where are you going? It's clearly an asset that's very, very needed. So is that deal a good place for your capital to go? Stop worrying about "well, am I in at the right time?"
Is it a good deal for you? Is your capital going to be happy there and earn you a return?
Chase Leavitt: So are you saying buy real estate and wait... don't wait to buy real estate?
Steve Olson: It's a good saying! I had one of my associates point out to me like, when I talked to an investor on the phone, that guy that's been in the market for 30 years and I say, Well, you know, how are you so successful? Why is real estate been so good to you? He never says, Well, you know, I'd locked that interest rate back in 1982. And got a point lower, and I wouldn't be where I am today... said nobody ever.
Sherida Zenger: No, he keeps buying. Even though prices keep continuing to rise, he keeps investing it back into the real estate market.
Steve Olson: And he keeps a thick skin for when prices don't rise because they don't always go like this. At some point, these are going to dip 10-15%. Guess what, even worse, maybe. We've all lived through that. But the point is, you look at those troughs. The next trough is always higher than the last trough.
Sherida Zenger: It always comes back up. So just hold on. Build-to-rent isn't a get-rich-quick thing.
Steve Olson: Unless there's some complete decimation of the population or some disruptive technology that allows us to live on Mars. Right? It's hard to imagine a scenario where it's this stuff is needed. And, and we just got to keep investing. So I think you keep doing it, especially to because so much of the national housing stock is old and the term is obsolescent, right?
How many houses were built in the 40s 50s and 60s that are just It's time, right? It's time to scrape those things. And especially with this green energy movement to write what's up to code green energy. I think that you're looking at a construction situation that's going to keep going. It sounds self-serving... we have the build-to-rent podcast.
Sherida Zenger: I pulled up an article and it said,
"only 5% of the inventory out there is built to rent".
So it's such a new market for people for the most part. I think it's the way to go.
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