You probably know someone who had to move during the depths of the housing depression but they didn’t want to—or couldn’t—sell their home into the worst housing market in 70 years. So they rented it out and joined the ranks of residential real estate investors called “accidental investors” or “accidental landlords.”
Other homeowners got tired of flushing away monthly mortgage payments, so they rented out the home they owned until they could figure out what to do with it and moved into a rental themselves. Still others inherited property or otherwise ended up with real estate that was bound to appreciate in time. They never intended to get into real estate investing, but one way or another they found themselves owning and managing a rental property or two.
Largely because accidental investors don’t consider themselves investors, estimating their numbers is difficult. Very little research has been done on this phenomenon even though there could be many more accidental investors than intentional investors. One of the goals of the Joint BiggerPockets.com / Memphis Invest National Survey of Residential Real Estate Investors that we conducted a year ago was to find how many accidental investors there are out there compared to the more active investors who rely on their real sate deals for much if not all of their income.
The Shadow Inventory of Single Family Rentals
We found that one out eight adult Americans either consider themselves residential real estate investors or own residential investment properties today. But 89 percent of that total do not plan to purchase additional investment properties. They do not consider themselves to be investors even though they own residential real estate that generates income. Clearly accidental investors out number active investors even though they are relatively invisible in the market place.
We wanted …read more