A few years ago, borrowers seemed desperate for money to flip houses. The market was good, mortgage rates remained low, and people itched to get that easy return. But now, we’re in an entirely different market. It’s tough to “fix and flip” in 2022 for two reasons: cheap homes are hard to find and institutions are buying up anything that’s decently affordable.
So, where are borrowers turning instead? To short- and long-term rentals — the hottest trend in real estate.
If you want to build your lending business and watch your private money fly off the proverbial shelves for the next 6–12 months, this is our advice: Position your capital as funding for the borrower’s next rental property.
The rental market has been booming since 2020, and it’s only becoming a more attractive investment. As we said, housing prices are high — so they’re pricing out many millennials right alongside the fix-and-flip investors. That means a larger share of the population is looking to rent long term because they can’t afford to buy their own homes. Short-term rentals are also explosively popular in this post-COVID age of remote work. Millions of people have discovered they can do their jobs just as easily from an Airbnb in Tennessee or a Vrbo in Hawaii as from the big city.
Given that background, it’s no wonder that about half of the current private loan requests we receive from borrowers are about short- and long-term rentals. Our team at PrivateLenders.com also fields requests for bridge loans, new construction loans, and fix-and-flip loans (even if they aren’t as popular). New construction loans in particular don’t seem to be as hot as other platforms will lead you to believe — although we’ve sent Kevin Earnest to the Pitbull Conference this summer, the largest private lending conference in the country, to get the full inside scoop.
For the borrowers we work with, short- and long-term rentals are the investment of the moment. Our team can connect you with those borrowers looking to buy. Tap here to learn more and get started!