Investing in real estate or becoming a landlord can be a daunting prospect, especially in a volatile market. But for many women seeking independence, particularly after a breakup or divorce, it has become a source of emotional empowerment and even healing (NYT 7/29/2022). They have had to overcome a steep learning curve and often face skepticism from others. However, there is a growing community of women who are finding success in the industry.
According to Charles Tassell, the chief operating officer of the National Real Estate Investors Association, women now comprise nearly one third of its membership. A decade ago, women were often part of wife-husband investor teams, but today, there are more single, individual women coming in. Lady Landlords and Real Estate InvestHER are two online communities designed to support female real estate investors that have seen steady growth. These groups offer paid mentoring services, local meet-ups, and annual conferences. In their language and mission, both groups emphasize that taking care of oneself mentally and emotionally is critical to building a successful business.
The Real Estate InvestHER co-founder, Elizabeth Faircloth, explains how she lost herself while building a business with her husband and trying to figure out her identity as a new mother and married woman. Similarly, Stacey Conte found the Real Estate InvestHER community shortly after ending her abusive marriage in 2018. The group filled the gap left by her lack of support system, particularly the other women who started investing “when they made the transition to being a single mom.” Conte and her business partner, Betsy Tinervin, bought three boarded-up cottages on a busy road in Lakeland, Florida. They renovated them to give single moms and their children a sense that they have their own space.
However, women in the real estate industry also face gender bias, which can lead to pitfalls. A 2020 paper from the Yale School of Management found that single women see much lower returns from buying and selling real estate than single men. The Lady Landlords and Real Estate InvestHER message boards are full of questions and complaints about how to address unequal treatment. Mr. Tassell of the National Real Estate Investors Association emphasizes the importance of self-defense as well as self-care when visiting job sites or meeting tenants at off-hours. Women have to be more careful and conscientious about whether someone is preying on them or not.
In a 2014 article by Stephanie Taylor Christensen, (Yahoo! Finance, 2/23/2014) female landlords are advised to mitigate risks by having a tenant they trust, whether long or short term. To achieve this, it is important to conduct full background checks and call as many references as possible. Competitive pricing is also essential; setting your rent at 5 to 10 percent below comparable properties can help you attract tenants and keep them for longer. Additionally, making the rental payment process convenient can save both landlords and tenants time and headaches. Using personal payment services like Zelle or CashApp can help.
Investing in a rental property requires a significant amount of capital. Most lenders require a 20% down payment, and borrowers must income qualify without including the anticipated rent yielded by the property. For many, the fastest route to becoming a landlord is to purchase a new home and then rent out their old one. However, most people need the proceeds from the sale of their previous home to fund the down payment on a new one. This means that if becoming a landlord is among your goals, it is crucial to start saving now.
While investing in real estate or becoming a landlord can be a source of stress and pitfalls, there is a growing community of women who are finding success in the industry. Female real estate investors are advised to take care of themselves mentally and emotionally and to be vigilant against gender bias. Women who are contemplating building wealth through investing should strongly consider acquiring rental properties. Connect with the Forza team to find out how!