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Experts: Real estate investors may soon ‘cash out’ of property investments

PHOENIX — Real estate investors who swooped in to buy single family rental properties in the last three years may be looking to “cash out” soon, according to data from RealtyTrac.

As the market raises home values, investors today are facing a potential gained equity return of 26 percent, according to the RealtyTrac study, which looked at 200,000 home purchases between January 2012 and August 2014.

On average, the data shows a purchase price of $167,556 along with a current estimated value of $211,897.

“If you look at their investment strategy, it is somewhere in a five to seven-year window for these properties,” said Darren Bloomquist, vice president of RealtyTrac. “So I’d say many of them are going to be looking to get out of the market within the next three years.”

And institutional investors, in particular, look to have the best gains awaiting them, with RealtyTrac expecting returns of 38 to 43 percent on homes purchased in 2012.

This trend is happening across the country, but Bloomquist said it’s definitely specific to Phoenix, too.

“The market in Phoenix is going to continue to shift away from the sellers’ market that we had seen over the last few years and more toward a buyers’ market, where the buyer has a better advantage,” he said.

Bloomquist expects as many as half of the homes purchased between 2012 and 2014 to be sold in the next three years.