I’m bullish on single-family homes due to rising rents, rising home prices, and declining vacancies. I would buy more single-family homes, however, I’m tapped out because I just bought my third single-family home in 2020. Further, with two young kids, I’m at my energy limit in terms of being a landlord.

Therefore, let’s look at how to benefit from the single-family real estate boom without being a landlord. The following is a guest post from Financial Samurai partner, Fundrise. Fundrise was founded in 2012 and is one of the leading real estate crowdfunding platforms today.

I worry for renters trying to buy property and our children who have little or no earnings power. The U.S. housing market might get as hot as the Canadian housing market.

If you think the U.S. housing market is bonkers, you haven’t been paying attention to our neighbors up north. Not only is the Canadian housing market more expensive than the U.S. housing market, but average wages in Canada are also lower.

If the world suddenly finds out the U.S. housing market is one of the cheapest in the world, I fear our children will be priced out of the U.S. housing market forever. If enough renters get priced out, there might just be a revolution!

I have a love-hate relationship with being a landlord.

On the one hand, being a landlord has been instrumental to our path to financial freedom. Rental property income accounts for roughly half of our total passive income of ~$310,000.

On the other hand, having to deal with difficult tenants and maintenance issues is a source of stress.

As I’ve gotten older, my desire to be a landlord has waned. Therefore, I started investing more money in REITs like O and OHI, a real estate ETF called VNQ, and real estate crowdfunding. Being able to invest in real estate and earn income 100% passively without having to deal with any issues is my ideal scenario.

Now, national rents are rising and so are the fortunes of landlords. Once again, I find myself conflicted as a mom- and-pop landlord who wants to provide the best source of housing for my tenants.

At the same time, I also want to do the best I can to provide for my family. To do so requires optimizing rental income to keep up with the market given the cost of almost everything is always rising.

Real estate investment opportunities are available in all types of markets. It just so happens we are in one of the strongest real estate bull markets ever. As someone who believes the housing market will continue to stay strong for several more years, I’ve purposefully positioned ~40% of my net worth in real estate.

However, with all investments that carry risk, there are no guarantees. All of us must do as much due diligence as possible before making any investment decision. The greater the capital outlay, the more time we should spend evaluating various investment scenarios.

As someone who has been through several economic downcycles before, my worry goes up the better the market gets. During a bull market, it’s easy to lose our discipline. The last thing I want is for all of us to think we’re the next Warren Buffet of real estate investing.

Therefore, I’ve invited CrowdStreet, a leading real estate crowdfunding platform and FS partner, to share with us a logical real estate evaluation framework they use.

Are you thinking about buying a home today? Then you need to also envision a scenario where you buy a home at the top of the market. If you do, will you be able to afford the monthly payments? If there is a downturn, can you continue to pay the ongoing insurance and maintenance expenses as well?

The housing market is strong right now. It should continue to stay strong for several more years, albeit with slower price appreciation. However, the upside is not guaranteed. Even if there’s an 80% chance the property market could continue to go up, there’s still a 20% chance it could get knocked down.

If you lose your primary source of income, usually your job, will you also be able to afford your home? Buying a home with mortgage debt is a big decision. Please treat a home purchase with the utmost respect.

Everything was feeling pretty incredible in 2006 and 2007 as well. Then the housing market crashed and burned for the next three years. Despite the vaccines, we’re not out of the woods yet. Therefore, it’s always good to exercise prudence when buying a home.

If you’re looking to save money when buying a home, you may want to let only the listing agent represent you instead of having a buyer’s agent. It’s an unusual move, but one I’ve conducted three times. Overall, this strategy has saved me about $350,000.

In real estate, a listing agent is the person who lists a home for sale. With inventory down and demand up, having a listing is like winning a golden ticket. A prospective buyer normally has their own real estate agent for representation. Let’s call this agent the buyer’s agent.

An excellent buyer’s agent knows the market well in order to help their client offer the right price. The buyer’s agent should also know what type of landmines to look out for when purchasing a property. An experienced buyer’s agent is also a master negotiator.

However, the cost of using a buyer’s agent is generally half the listing agent’s overall commission. The standard selling commissions is now 5%, down from 6%. Therefore, the listing agent and the buyer’s agent each get 2.5% of the final selling price of the home.

If you buy directly with the listing agent, you may get to save up to 2.5% off the purchase price.

Here’s an insightful post by CrowdStreet, a leading real estate investing platform, explaining the capital stack and the difference between debt versus equity investing in commercial real estate. CrowdStreet is a leading real estate crowdfunding platform focused mostly on secondary cities with lower valuations and higher cap rates.

Most individual investors tend to buy physical real estate and hope the equity in our property grows over time. We tend to take all the risk and bear all of the reward or failure. However, if you are more risk-averse, you may want to invest in real estate debt instead. In other words, you can act more like the lender to make a return.

Where you invest on the capital stack matters with regards to when and how you get paid. Let’s take a deeper dive into debt versus equity investing in real estate. I’ll then share some concluding thoughts.

In 2020, we bought a forever home. We found a relatively good deal as panic set in during the first month of lockdown. We decided that if we are going to be cooped up for an unknown period of time, we might as well live in a more comfortable space.

The forever home is about 35% larger than our previous home. It has a nicer layout for two children and a guest. There should be no problem living in our current home until our kids become adults.

However, based on my track record of buying properties since 2003, I have my doubts we’ll be living in this home for the rest of our lives.

In a strong real estate market where you might be constantly getting outbid, buying one and done has its benefits. If you’re debating about whether you should buy a forever home or whether to upgrade to a forever home, this post is for you.

I’m bullish on the housing market over the next three years. It’s one of the reasons why I’ve invested $800,000 in a real estate fund focused on Southern and Midwestern properties.

In addition to my real estate fund investment, I’m buying San Francisco ocean-view rental properties as well. Real estate is one of the most attractive asset classes to build wealth in a low-interest rate environment.

In this article, you will read 16 reasons why the average homeowner will likely be richer through 2024 than poorer. I have so much conviction in my housing market thesis that I’ve not only put my money where my mouth is, I’m also planning on re-retiring soon.

With the expected rise in real estate prices and rents, there’s no reason to work as hard to make money anymore. Having your investments make money for you so you can win back your time is what financial freedom is all about. The pandemic was an exhausting time with two young children at home. It’s time to

However, before I share all the reasons why the housing market won’t crash any time soon, let me first share some more background so you know where I’m coming from. After all, we all have our biases, and I am positively biased towards housing.

Brief Real Estate Background

Roughly 40% of my net worth is exposed to real estate. If I only owned stocks and real estate, real estate would account for a 60% weighting. My real estate portfolio consists of properties in San Francisco and Lake Tahoe, three publicly traded REITs, and a real estate crowdfunding fund focused on heartland real estate.

These assets generate roughly $150,000 a year in relatively passive income. If it wasn’t for real estate, I’d probably still be working a traditional job.

I’ve been buying real estate since I first came to San Francisco in 2003 because I found valuations to be cheap compared to Manhattan real estate. I had worked in Manhattan from 1999-2001 and never imagined being able to find a 2/2 park-view condo for under $600,000.

I kept buying real estate because I also realized U.S. real estate was, and still is, cheap compared to international real estate. Working in international equities enabled me to explore various countries while working. And I always checked out the various local real estate markets while on business trips. Not only is U.S. real estate cheap on a global context, we also have jobs that make U.S. real estate affordable.

Take a look at the real estate statistics from one of our biggest foreign buyers, Canada. Cities like Vancouver and Toronto are equally as expensive as the most expensive cities in America. Yet, there are hardly any big Canadian companies that come close to paying as much as U.S. companies.

Go ahead. Try to name just three Canadian companies that pay new college graduates over $100,000 a year.

At the start of COVID in 2020, I encouraged readers to buy real estate through posts such as:

• How Are Real Estate Prices Impacted When Stocks Decline (March 16, 2020)
• Real Estate Buying Strategies During COVID-19 (April 19, 2020)
• The Best Near-Term Real Estate Buying Opportunity: Your Own City (June 2, 2020)
• It’s Time To Focus On Big City Real Estate Again (Sept 8, 2020)

Finally, I followed my own advice and bought a forever home in 2Q2020. I put my money where my mouth is. Otherwise, there’s no point talking so much about finances.