Investor Portfolio Appreciation Varies

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IRVINE, CA-The cumulative appreciation in estimated value of residential investment purchases varies by investor purchase volume, RealtyTrac reports. The firm studied real estate purchases made by investors between January 2011 and September 2013, and discovered differences in valuation as well as resales depending on the number of properties purchased during that time.

The value of properties purchased by investors who bought between 10 and 99 during the time period appreciated 22%; for those who bought between 100 and 499 properties, appreciation was 24%; and for those who bought more than 500 during the time period, appreciation was 18%.

The firm also found that residential investors who purchased fewer than 100 properties sold a greater percentage of them during that time period than those who purchased more,. The data is in line with the firm's findings recently reported by GlobeSt.com that only 1% of properties were resold between January 2011 and September 2013 by entities purchasing at least 1,000 properties; this percentage increases as the number of properties purchased decreases.

For all investor purchases during that time period, 22% were subsequently resold, according to RealtyTrac. In addition, states with higher-than average percentages of resales included Nebraska, Minnesota, Virginia, California and Maryland. Among metros with a population of 200,000 or more, those with higher-than-average percentages of resales included Richmond, VA; San Diego; Cape Coral-Fort Myers, FL; Omaha, NE; and Memphis, TN.

The percentage of properties resold tended to be lower for investors who purchased larger quantities of properties, RealtyTrac reports. Investors who purchased between 10 and 99 properties during the time period studied resold 29% of those properties; investors who purchased between 100 and 499 properties resold 19%; and investors who purchased 500 or more properties during the time period resold 5%.

As GlobeSt.com reported earlier, Daren Blomquist, VP of RealtyTrac, told GlobeSt.com, “These bigger investors are more committed to the original plan of holding onto these homes as rentals for at least three to five years, if not longer. “The mid-tier and smaller investors are more on the buy-to-rent bandwagon and are more likely to cash out as home prices continue to increase. In addition, the larger investors have more dollars to spend on the managing of these rental homes, whereas the mid-tier and smaller investors are more likely to be overwhelmed by that aspect of the business model.”

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