With the shift toward renting and away from homeownership since the 2008 financial crisis, you might have thought about rental homes as an investment proposition.
And you may have been turned off by the thought of managing the properties — everything from bringing in tenants to taking care of maintenance.
But now you can invest without the hassles, thanks to real estate investment trusts (REITs).
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"Brokers, property managers and others are helping buyers purchase houses in distant cities and manage them as rentals for a fee," writes
Wall Street Journal reporter AnnaMaria Andriotis.
"Publicly traded trusts that collect rental income are selling shares to investors."
So you can invest in homes for the price of a share of stock, and you don't have any management responsibilities. There is potential for a strong return, Andriotis says.
"But the plunge in U.S. home prices in the financial crisis should be a fresh reminder that bets on housing can sour in a hurry," she writes.
To her point, housing starts plunged 14.4 percent in August, the most since April 2013.
Fannie Mae recently turned more pessimistic on housing, predicting sales will decline for the year as a whole, compared to 2013.
"We have downgraded our outlook following the disappointing housing activity seen during the first half of the year,"
Fannie Mae economist Douglas Duncan wrote in a commentary last month.
"On the demand side, there appears to be a conservatism among consumers and their willingness to take on big-ticket purchases, such as homes."
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