Survey: 65% worry about inflation, 63% rising interest rates and 58% access to capital concerns. Still, investors continue moving forward on projects.
SAN FRANCISCO – Inflation is a leading concern among real estate investors, but it’s not preventing them from moving forward on projects, according to a new survey from Kiavi, a provider of financing to real estate investors. Kiavi surveyed 503 real estate investors who were not the company’s customers.
When investors were asked what their top concerns for 2022 are, they said the following:
Rising interest rates: 63%
Access to capital: 58%
“It’s no surprise that inflation is top of mind with real estate investors as I think that’s the case for most Americans today,” says Michael Bourque, CEO of Kiavi. “Even still, we’re seeing our customers continue to identify smart investments and make good decisions. With over two-thirds of U.S. homes 30 years old or more, real estate investors will continue to play an important role as they revitalize aged homes and make them move-in ready for millions of families across the country.”
Pain points in a transaction
Investors surveyed said that besides inflation, supply chain bottlenecks, and rising interest rates, they are also facing several pain points in their search for investment properties. For example, 45% said they are facing too many hoops to jump through to purchase a property; 44% said there are too many different parties to coordinate with when purchasing a property; 38% said they didn’t have enough data about the property to determine its return on investment; and 31% said they did not have enough information about the process and weren’t sure how to begin.
“I am not surprised to see some of the pain points that REIs face today,” Bourque says. “The real estate industry is ripe for disruption. Oftentimes the processes are opaque and paper heavy.”
Many respondents reported long waits to receive financing as well. While 43% said it takes one to two weeks to receive financing for a project, other respondents said it took longer. Twenty-seven percent said it takes between two to four weeks, the survey shows. Ten percent said it takes one to two months, and 6% said it took three to six months.
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