Dave:
Zillow has released their 2026 housing market predictions. Here’s what I think they got wrong. And fair enough, what they got right too. Mortgage rates, home prices, affordability. We all want to know what’s going to happen this year in the real estate market. I’ve made my predictions. Zillow has published theirs. Let’s see how they stack up. Hey everyone. I’m Dave Meyer. I am a trained data analyst and I’ve been analyzing the housing market in particular for 15 years now, alongside being a real estate investor as well. I released my own personal predictions for 2026 mortgage rates and home prices back in December. And of course, when the biggest names in the real estate industry release their own forecasts, I like to see if my forecast is aligned, if we agree or disagree on some of the big points. So that’s what we’re going to do today.
I’ll go down the list of Zillow’s 10, 2026 housing market predictions and tell you which I think will come true and which I’m not so sure about. Zillow’s key takeaways from their predictions are that home prices will rise about 1% nationationally and that sales volume will increase 4%. They see the housing market getting healthier and better conditions for buyers. And I broadly agree with that sentiment, but not every single one of these predictions. So let’s get into them one by one. All right, prediction number one from Zillow says, “Home values will rise modestly.” They say, quote, “US home values are forecasted to grow 1.2% in 2026. After national values were roughly flat in 2025, next year’s forecast reflects expectations of gradually improving affordability and steady buyer demand. Mortgage costs should ease a bit in 2026, helping more buyers stay in the market and support modest price growth in many parts of the country.” So Zillow is saying they are expecting very modest growth, 1.2% that is a modest nominal home price.
They’re predicting, I should mention, real home prices, so inflation home prices would fall in the scenario about 2%. Now, if you didn’t watch the episode where I made my own predictions about home prices, my prediction was that home prices will come in a range of negative four to 2%. So I think roughly flat is about where we’re going to be. And if you had to ask me today, am I leaning towards plus 1% like Zillow or minus 1%? I would say minus 1%. But for all intents and purposes, I think Zillow and I are saying pretty similar things here, right? Because it’s pretty hard a year out, especially given everything that’s going on in the economy to say, “Yeah, it’s going to be just north of zero or just south of zero.” But I think the important takeaway here is that both Zillow and I, and I should mention other major forecasters who do these types of projections are all basically saying they don’t expect home prices to move that much on a national basis.
And that’s really where I’ve come out. Inventory growth has really sort of stalled out. We’re basically where we were a year ago. It’s same year over year, new listings are flat and demand has stayed relatively strong despite all the economic uncertainty. And because of this, we’ve sort of gotten to this point where there is relative balance in the housing market. For years during the pandemic, it was a strong seller’s market. This year it became more of a buyer’s market, but it’s coming back closer to balanced, which is why I think both Zillow and I are saying it’s going to be relatively close to flat because when things are in balance, that is what happens, right? Things are pretty much flat. Now, the reason I’ll just tell you, I’m leaning just slightly towards the negative. I would not be surprised at all if they were up 1% next year.
Not at all. But if you’re saying why, when I made my predictions back in December, I said just a little bit below zero, it’s because I think the economy is really fragile right now. The labor market is really uncertain. Inflation, we haven’t gotten data for that in two or three months now because of the government shutdown, but you see all these signs that Americans are stretched and are struggling with affordability and housing affordability is absolutely part of that. But I think what happens when we see more people struggling to pay their auto loans or struggling to pay their student debt, or just pulling back in general, we might see some fall off in demand in the housing market. Now that could be offset by falling mortgage prices, but just in the markets I operate, things are cool. Days on market are going up. No one is eager to buy right now.
Even though people are buying, it’s taking a lot longer. In all the markets I operate in, prices are feeling pretty soft. And that’s why I think over the course of next year, they’re not super likely to accelerate again unless we see big decreases in mortgage rates, which we’ll talk about in just a minute. So for prediction number one with Zillow, I think we’re directionally in the same place saying that home prices are likely to remain close to flat. I am slightly more pessimistic about prices, but generally I think we agree. Prediction number two from Zillow says fewer owners will be underwater as prices firm up. “With home values expected to rise in most major markets, fewer homeowners will see their zestimate fall below what they paid for their home.” This stands in contrast to 2025 when home values have fallen in 24 of 50 largest markets as of October, a number of Zillow forecasts will be cut in half to 12 markets next year.
Stabilizing prices means more homeowners will continue building equity rather than losing it at least on paper. Now, I was trying to not split hairs with the first prediction of being positive 1% and negative 1%, but maybe they’re making me make a call here because if I am correct and the prices are down a little bit, then I can’t agree with the second one and say that fewer owners will be underwater as prices firm up because if prices go down even 1%, I think by nature that means that you’re going to have more mortgages underwater. Now, if you don’t know what that term means, a mortgage underwater is basically when you owe more on your loan, then the property is worth. So maybe you bought a house at $300,000, you put 10% down, so you had only $30,000 in equity, you borrowed $270,000, prices go down and now the home’s worth $265,000, that is a mortgage that is underwater.
Right now, there are about 900,000 mortgages that are underwater, which is about 1.5% of the total mortgage market, and that number has definitely gone up because anytime prices go down, that’s when that starts, right? If you’re in a constantly growing market, almost no mortgages are underwater, because the value of those properties keep going up and up and up. And so being in a housing correction like we are in right now, you are of course going to see more mortgages go underwater. So that doesn’t really concern me. If you listen to our housing market updates, I talk about this a lot that mortgages being underwater doesn’t worry me on its own. If you have mortgages underwater in combination with forced selling, that’s a problem, but there’s no signs that that’s happening right now. So for me, it sounds like Zillow is saying that the correction that we’re in is going to bottom and that we’re going to see prices go up again next year.
If you’re asking me as of today, I don’t think so. I think that we are going to be very close to flat. I would say there will be marginally more mortgages underwater in 2026 than there were in 2025, but I don’t think it’s going to be dramatic. I think it’s just going to be a little bit more. All right, so that was prediction. Number two, I’m going to disagree with Zillow, but I’m guessing if we each had to forecast the total number of underwater mortgages, they would probably be pretty close, but we’re doing this for fun. And so I’m going to say, I disagree with this one. I think this one, underwater mortgages are going to go up. Prediction number three, the one you’ve probably been hoping I will get to is mortgage rates will hold above 6%. Sorry for everyone who is holding their breath for lower mortgage rates.
Zillow does not see them coming below 6%. They say, “Even for the experts for seeing mortgage rates a year out is about as difficult as predicting next year’s weather forecast. However, mortgage rates are shaped in part by inflation and Zillow has been accurately predicting shelter inflation, which makes up 40% of the consumer price index. Because of that, we are willing to put ourselves on the record. Mortgage rates are unlikely to fall below 6% in 2026. Borrowers have already seen some relief this year pushing affordability to a three-year best. Gradual rate moderation should help more buyers reenter the market, even if ultra low pandemic error rates remain far out of reach. Okay. Zillow planting their stake in the ground. Is that a saying? Plant their … What is the saying? Putting their foot down. I don’t know. They’re doing something. They are being bold and saying that mortgage rates are not going to come down below 6%.
And I agree with that. I think there might be a point in 2025 where we get into the fives. I’m not saying that that’s impossible, but if you were to ask me for the average of mortgage rates for all of 2026, I believe it will be above 6%. I said in my December mortgage rate forecast that I think we are going to have mortgage rates stay in the range of five and a half to six and a half percent. That’s for a whole year, right? Mortgage rates move a lot. So if you want to forecast where they’re going to be for a whole year, it’s kind of hard to just pick a number. So you got to give a range. That’s the range that I am giving. And if you asked me where I think the average will be, if you took an average of every day in 2026, I think they’ll be at like 6.1%, 6.15.
I don’t know. Somewhere just a little bit above six is my guess. That is an improvement from where we are today. As of this recording, they’re in about 6.3%. So I do think there is some room for improvement. I wouldn’t be surprised if they fall to six. If they fell to 5.9, I’d be a little surprised, but I’d be happy, but that’s within my range. But I agree with fundamentally what Zillow is saying here, that inflation is going to keep mortgage rates higher than most people are forecasting and most people are thinking. This is unfortunate, but inflation is likely to go up for a couple of reasons. You look at things like tariffs, you look at things like our national debt, you look at the price of inputs for manufacturers. There are a lot of reasons to think that we’re not getting below the 2% target the Fed has set in the next couple of years.
And I think there is reasonable risk that inflation keeps going up. I don’t think it’s going to go crazy, but it might keep creeping up a little bit. And that is likely to keep bond yields and mortgage rates high. I won’t get into all of the details of this, but what you should know is inflation is the number one barrier for mortgage rates coming down. And it’s really less to do with what the Fed is going to do in terms of rate cuts and has more to do with inflation. I think that’s the main theme in 2026. And so if inflation starts to come down, mortgage rates can come down more, but it’s moving in the wrong direction right now, which is why I agree with Zillow on this one that mortgage rates on average in 2026 will remain above 6%. So those are Zillow’s first three predictions.
Home values will rise modestly. I think they’ll decline modestly, but I feel pretty aligned with Zillow on that one. They said fewer owners will be underwater as prices firm up. I’m predicting the opposite, but I agree with them when they say mortgage rates will hold above 6%. We do have to take a quick break, but when we come back, we’re going to talk about existing home sales and whether sales volume will finally pick up. We’ll talk about new construction, rents, and much more. We’ll be right back. Running your real estate business doesn’t have to feel like juggling five different tools. With Ree Simply, you can pull motivated seller lists, skip trace them instantly, for free, and reach out with calls or texts all from one streamlined platform. The real magic AI agents that answer inbound calls, follow up with prospects and even grade your conversations so you know where you stand.
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Welcome back to the BiggerPockets Podcast. I’m Dave Meyer going over Zillow’s 2026 housing market predictions. Before the break, we talked about home prices. We talked about mortgage rates and we talked about the number of mortgages underwater. Let’s move on to Zillow’s fourth prediction, which says existing home sales will climb slightly. Zillow’s forecast calls for 4.26 million existing home sales in 2026, a 4.3% increase from this year’s projected total. Years of limited inventory and high mortgage rates have created a pent up demand to move that should start to release as affordability improves. A stronger than expected fall season has hinted at what’s possible this spring if recent affordability gains persist. This is optimistic, and I actually agree with them. I think that home sales will climb up a little bit. I think demand has been pretty good this fall, surprisingly good. And although I have my concerns about the economy, I do think demand is not going to fall off a cliff.
I think we might see more supply than people are expecting and some of the de- listings that have been coming off the market recently might go back up, which is why I’m kind of leaning towards modestly negative home prices next year, but I am optimistic that we will start to see more home sales. Now, I know for most people home prices and those predictions are what people really care about. That’s kind of the sexy thing to look at, but for the housing market to get back to a healthy level, we got to have more home sales. It’s just slow. This year we are on pace for about four million existing home sales, which may sound like a lot, but it is well below the long-term average of 5.25 million. So we’re more than 20% down from normal. And it feels particularly dramatic because during the pandemic, we are at abnormally high levels of home sales like six million.
And so we’re down about 50% from where we were in 2022. That’s why the market, I think, feels so slow to people. But for anyone who works in the industry, if you’re an agent, a lender, a property manager, this should be good news. It’s probably not where you want to be. They’re saying it will go up to four and a quarter million. It’s not a good year. In any other year, this would be a bad year, right? But we got to see things turn around and hopefully they are correct and this is a baby step towards more housing activity incoming years. And so I’m going to agree with this one that existing home sales will climb slightly. Zillow’s fifth prediction is about new construction. They say new construction will see its weakest year since before the pandemic. Zillow says, quote, 2026 is shaping up to be the slowest year for single family home construction starts since 2019, following a notably weak year in 2025.
Because there’s a large stock of new homes already built and others still under construction, builders are expected to hold back on starting new projects. Single family starts are trending 5% below last year’s pace as of the latest reading in August. A further 2% drop off of that pace in 2026 would bring starts below the roughly 947,000 homes begun in 2023. Currently, the low watermarks since the start of the pandemic. Expect builders to continue leaning heavily on incentives such as rate buydowns to keep inventory moving, particularly in markets where affordability remains tight. So do I agree that we’ll see less total new construction starting in 2026 than 2025? Yeah, I think that’s probably likely. We have seen an incredible amount of incentives have to be used to move inventory in 2026. And with just unclear forecast for inflation and affordability, builders might pull back a little bit further in 2026.
So I generally agree with this, but I just want to say their headline that this is going to be the weakest year for new construction since before the pandemic, that’s from the builder’s perspective. I just want to offer a different perspective because from a buyer’s perspective, from an investor’s perspective, this might be the best year for new construction that we have ever seen. Actually, as of this recording, the median price for a newly built home is cheaper than that of a existing home. That has never really happened before. And this, I have said before on the show, I think is a really interesting opportunity for investors because of all the things Zillow just said, and I agree with, builders are offering huge incentives. They’re buying down mortgage rates. They’re offering seller concessions. They’re offering free upgrades to sort of like spruce up the finishes on a home.
They don’t really like lowering the price, but if you negotiate really hard, they might be willing to do that, but they’ll probably do lots of other things worth tens of thousands of dollars to get you to buy a home. And so I continue to believe that we’re in this very unique time where new construction is a viable option for real estate investors. It’s not good everywhere. It really depends on the location. A lot of new construction happens to be out in sort of these remote, random kind of tertiary markets or like in the suburbs of a tertiary market. I wouldn’t buy that stuff personally, but there are places where you can actually in good markets with strong fundamentals buy new construction at a good rate. It’s probably not going to be the best cash on cash return ever, but if you can find ones that’s cash flowing, you might actually do better on that in terms of cash long term because your CapEx, your repairs, your maintenance costs are going to be lower.
And that’s really appealing because everything is brand new. But also secondly, if you’re getting a rate buydown into the fours, which I have absolutely heard happening, this is definitely happening. A rate died down into the forest, definitely into the fives. Your cashflow might not be that different from an existing home because yeah, you might be paying a little bit more, maybe not, depending on the market you’re in, but your costs are going to be a little bit less, your rent’s going to be higher because you’re renting out a brand new home and your financing costs might actually be lower. So I think the weakness that Zillow is citing for new construction is actually strength for investors and buyers of new construction. It’s one of the things I’ve personally looked at a little bit. There’s not a lot of new construction in the markets I’m investing in right now, so that’s the reason I haven’t pulled the trigger on it, but I know other investors in Texas and Florida who are doing these kinds of deals because they’re getting deep value on them.
So something depending on where you live, you could consider for your 2026 strategy. All right, let’s move on to Zillow’s sixth prediction, which is that apartment renters will see relief. They say rent affordability is expected to continue improving in most of the country after a year in which 35 of the 50 biggest markets saw incomes grow faster than rents. A median income household would spend 27.2% of income on the typical US rent as of October, the lowest share since August of 2021. Zillow forecasts multifamily rents to rise just 3% in 2026, giving incomes a chance to catch up even further. Single family rents are projected to climb by 2.3% as many buyers delay home purchases. Okay. So will apartment renters see relief? Yes, I agree with this one for sure. I think there’s an important caveat for everyone to understand because you might be thinking Zillow just said rents on single family homes are projected to go up 2.3% as of this year.
How is that relief for apartment renters? And this just comes down to some basic economic stuff here. But what Zillow is saying is that if rents go up only 2.3% for a single family home, but wages, the average amount that people earn is up, let’s say 4%, it’s kind of close to where it is today. If went up 4%, then relatively rents are getting cheaper, right? Even though the price you pay on paper is going up, your ability to afford that rent is improving because your income is rising faster than your rent. And I do agree with that, particularly on the multifamily side. I don’t think we’re going to see much growth in rent on multifamily. They’re close to flat. They’ve been flat for a while. I know that we are working through this multifamily glut. I am very well aware of that, but I just think this is just me.
I think household formation is going to be muted in the next year. We’re seeing data from all over the economy that people are struggling, car payment, delinquencies are going up, student loan delinquencies are going up. It’s not an emergency by any means, but it can weigh on household formation. The other piece of this though is the wage piece. And I am hopeful that wage growth will continue to stay positive. There is this thing in economics, it’s called real wage growth. It’s like, is our wage is growing faster than inflation? And that has been one of the bright spots of the economy since I think it was February 2023, we sort of crossed this threshold where wage growth was higher than the rate of inflation. And that has still happened. We’ve had that for the last, I guess it’s almost two years now. We’ve had real positive wage growth.
Now the amount of that real wage growth has declined a little bit. It was about 2% a year ago. Now it’s about 1%, but I’m hoping that that will continue. I do have some fears about that. I’ll be honest with AI and rising unemployment rate, people tend to lose negotiating leverage in their wage negotiations. And so that can lead to lower real wages, but I am optimistic that wage growth will stay above the pace of rent increases. So I say yes to Zillow, apartment renters will see some relief. All right, we have made it through six of Zillow’s 10 predictions for the 2026 housing market. I got four more for you though. We got to take a quick break. We’ll be right back. The Cashflow Roadshow is back. Me, Henry, and other BiggerPockets personalities are coming to the Texas area from January 13th to 16th.
We’re going to be in Dallas, we’re going to be in Austin, we’re going to Houston, and we have a whole slate of events. We’re definitely going to have meetups. We’re doing our first ever live podcast recording of the BiggerPockets Podcast, and we’re also doing our first ever one-day workshop where Henry and I and other experts are going to be giving you hands-on advice on your personalized strategy. So if you want to join us, which I hope you will, go to biggerpockets.com/texas. You can get all the information and tickets there.
Welcome back to the BiggerPockets podcast. I’m Dave Meyer going through Zillow’s 10 2026 housing market predictions. So far, I think we’re agreeing in principle on most things. I’m nitpicking a couple things here or there because that’s why we’re doing this podcast episode. But I think overall, we see the housing market in relatively similar ways, but let’s go on. We got four more to go and we’ll see if we agree or disagree. Number seven reads, “The lifestyle renter will emerge as a force.” Zillow says, quote, “For a growing share of Americans, renting is a deliberate choice that supports mobility, reduces home maintenance burdens, and better fits the way they want to live.” Nearly three in five renters say they plan to keep renting next year, according to the Zillow Consumer Housing Trends Report. Even if mortgage rates dropped, only 37% say they would buy down from 45% last year.
This is just another example of why I’m saying I think household formation is probably going to be tepid this year. I just don’t think we’re going to see a lot of it because even if mortgage rates drop, if you do the math, for most people, for a lot of people, renting is still a better decision. Now, this is a real estate investing podcast. I’m not saying it’s a better decision than investing in real estate. I have made the argument many times that I think renting and buying rental properties is actually a great way to grow your portfolio, but I’m saying that if you were just to do the straight up math of, should I buy a home or should I live in a similarly priced rental, oftentimes the rental is better. Now, if you plan to live in that home or that rental for six, seven years, the math changes.
But if you’re just trying to figure out where you’re going to live for the next couple of years, rentals are often better. And so I do agree with this idea that lifestyle renters will emerge as a force. I think there are going to be people who choose to rent indefinitely. Looking at the housing market, looking at the rising costs of maintenance, of insurance, of taxes, like these expenses, we all know this as investors, right? That stuff’s going up. I understand that some people just see this and they’re like, “Man, it’s too expensive. I don’t want to deal with the stress. I like having a landlord.” And I know people have really strong opinions with that, but I do think we’re going to see more and more people opting for that. Now, what does this mean for real estate investors? I think the market for higher end and single family rentals is going to be strong for the foreseeable future.
I think if you as a landlord can offer a family a stable place to live in a good neighborhood that they feel like they can comfortably live in for three, four, five years, those are going to be really high demand and you’re probably going to be able to get really good renters. I really like this idea of appealing to people who are choosing to be renters and want to live in a high quality home for a long time. To me, that creates really good mutual alignment between the property owner and the renter. You both want the place to stay in good condition. You don’t want vacancy, you don’t want to move, you don’t want to leave, and you want a stable, predictable thing. I personally would be willing to think about longer term leases to these kinds of people with maybe a fixed or maximum rent increase for a couple of years to make them feel comfortable.
I think those kinds of things are great ways that tenants and property owners can work together to make rental housing more comfortable for people who are choosing this renter lifestyle. Now, I know this isn’t for everyone. I’m not saying that everyone should be a renter forever. It’s really a personal choice, but this isn’t even a judgment. I just am making a prediction. I think more and more people are going to choose to rent because housing is much less affordable than rentals. And I do think it is wise for investors to adapt and try to offer products that are appealing to these types of people. So that’s number seven. Moving on to prediction number eight. Zillow says kid fluence. I have not heard this word. I think they’re trying to coin a new term. Kidfluence will steer rental demand. They say, quote, “Lifestyle renting and affordability realities are changing who rents and what they need from their homes, like we were just talking about.
” Then they go on to say 37% of renters now have a child younger than 18 at home up from 33% a year ago, according to the Ziler Consumer Housing Trends Report. With Generation Alpha influencing close to half of their parents’ spending, families are bringing those prefaces into housing decisions as well. With parents making up roughly one third of today’s apartment shoppers, buildings that offer family-friendly amenities like imagination centers or homework pods will be better positioned to compete. I don’t know about this one. I’m sorry. Maybe I’m just old school about this, but I just imagine my parents, if they were shopping for an apartment and they just got a better deal on one, they would just take that regardless of if it had an imagination center or a homework pod in it. I don’t know if that’s just me and my parents, but I don’t really buy this.
Like maybe in certain cities this will matter, but I just have to imagine that if you are choosing to rent, yeah, probably school district matters and yeah, they want to be in a neighborhood that is safe, that is good for their children, where their friends live, where your friends live, where family lives, but I think these things are kind of gimmicky. Like maybe if there was two buildings sitting next to each other and they were the same rent, the same layout, the same square footage, and one of them had an imagination center and the other one did not have an imagination center, maybe the one with the imagination center wins, but I have a hard time imagining parents making huge financial decisions about something like this. It’s just, I think they’re trends. Everyone two years ago was like, “Oh, if you had a coworking space in your building, rents were going to go up.” I don’t think that’s really true anymore.
I’ve been in a lot of buildings where there’s a coworking space. I don’t think I’ve ever seen a desk be … Being used in my life. These things are a little bit gimmicky and I don’t think they’re really going to make a lot of influence over people’s decisions. So Zillow, I’m disagreeing with you on this one. Zillow’s ninth prediction is inflation savvy home features are becoming mainstream. They say, quote, “Rising household expenses will continue reshaping what buyers look for in a home. Energy efficient features such as zero energy ready homes, whole home batteries and EV charging stations are appearing more frequently in listings. Zillow predicts families will gravitate towards homes that are energy efficient and grocery optimized. Think walk-in pantries, garage-based cold zones for bulk storage, refrigerated drawers and smart organization systems that help families shop smarter and keep food fresh longer. Oh, no. What?
I’m sorry. I just don’t even understand what this is talking about. A walk-in pantry is now an inflation savvy move. What? That’s just where you keep your food. What difference does it make if it’s a walk-in pantry or just a regular drawer or a cabinet or you keep it on a shelf? What difference does it make? Garage-based cold zones. I don’t think people are going to start building this. Again, I think these are gimmicks that yeah, maybe people are putting them in listings. Maybe ChatGPT has decided these things are important. And so for all the agents out there who are using ChatGPT to make their listings, they are putting these things, but geez, I do not see this being mainstream at all. If you look at the zero energy, I don’t know about that either. How about this? I think if you look at energy efficient appliances, I’ll give you that.
Like you see stuff like WaterSense, which is like this EPA rating about water efficiency. Yeah. If you had a choice to use a toilet that’s going to cost you less money because it uses less water and it’s the same price, sure, people might be able to use that. Or if you have a fridge that is more energy efficient, it’s going to save you on your energy bill, or you get a heat pump that’s more energy efficient, save you on your energy bill. Yes, I think those things are probably going to be popular, but that’s not different. Like that is already mainstream. People already look at those things. There are stickers on every appliance telling you how much energy they use and people already are factoring those things into these decisions. So sorry, Zillow, I don’t see this one as a trend for 2026. I’m sorry.
All right. Zillow’s last prediction for 2026, AI will evolve from helpful assistant to transaction coordinator. They say, quote, “In 2026, AI will move beyond offering advice and begin coordinating steps in buying, selling, and renting process. Instead of simply recommending actions, AI assistants will help manage tasks end to end from connecting buyers and sellers with the right real estate agents to tour scheduling, to negotiations and closing prep. This agentic approach will streamline decisions, automate routine work, and make the transaction feel more predictable for everyone involved.” Okay. Maybe. Yeah, a little bit, but come on. I guess the problem is people will call anything AI. They still tour scheduling. If you were to go on showing time, you could just select a tour from a schedule. Is that AI? Why does AI need to get involved in that? It is already about as automated as possible. Does it have to predict what day you want to go and schedule it ahead of time?
I think they’re stretching a little bit on some of these things about how useful AI can actually be. Do I think AI is going to become more prevalent in real estate transactions? Yes. I do think for document management, for closing management, transaction coordination stuff like that, I think could be helped. Is it going to help in negotiations? I don’t think so, if I’m just being honest. I just don’t think that’s going to weigh into this. I personally would not trust AI to negotiate for me. I would much rather work with my agent and the seller’s agent to negotiate on something. Maybe some people will, but I think we’re still a little bit aways from that. So Zillow, I’ll give it to you on a couple small things, but I’m guessing a year from now, the transaction process for buying and selling real estate is going to look pretty much the same way it does today.
I’m not saying that’s going to last forever. I do think AI will evolve and become more involved in real estate, but I generally speaking, think that people are overestimating what AI can do right now. It’s a great research tool. I use it all the time for research, but interacting and connecting between actual humans is not really doing that right now. And maybe something will change in the next year, but I think we’re a little bit further out than that if I had to guess. So Zillow, not agreeing with you on this one either. All right, so that’s what we got. We had 10 predictions from Zillow. First one was home values will rise modestly. Although I’m a little bit more pessimistic, I’m generally in the same sense as Zillow that I think prices are going to be pretty much flat, nominal terms. I think they’re going to be down in real terms.
I disagree that fewer owners will be underwater, but I agree that mortgage rates will hold above 6%. I had a few more I agreed with Zillow on that existing home sales will climb, that new construction will be weak for sellers, but good for buyers, and that apartment renters will probably see some relief. But I disagreed with this idea of kid fluencers, not my area of expertise, but this just sounds off to me. I also disagree that their inflation savvy home features are going to emerge as mainstream. I will bet you next year, if I asked everyone I know if they have a garage based cold zone for bulk storage, 100% of them will say no, but maybe that’s a bet some of you are willing to take. Let me know. And I also disagree that AI is going to fundamentally transform how transactions are done in the next year.
I think it will be good for organization, for streamlining communications, but at the end of the day, it’s still going to work the same way one year from now as it does today. Those are my takes on Zillow’s predictions, but let me know what you think. We’ve gone through all 10 of them. I’m sure you all have your own opinions, so drop them in the comments and let me know what you think. That’s all we got for you today on the BiggerPockets Podcast. Thanks for joining us. We’ll see you next time.

 

Ashley:
What if rising rates made every deal feel impossible? Your cashflow no longer works and you’re starting to wonder if real estate investing is even worth it anymore. Or maybe you’re brand new in asking, how do I even break into this industry when I have zero experience?

Tony:
And when tax season rolls around, what should you actually ask your CPA to make sure you’re not leaving money on the table? Today we’re breaking down all three of these listener questions that get to the heart of what Ricky’s are struggling with right now, financing, experience, and taxes.

Ashley:
This is The Real Estate Rookie Podcast. I’m Ashley Kehr.

Tony:
And I’m Tony J. Robinson. And with that, let’s get into today’s first question. So today’s first question comes from Ray in the BiggerPockets Forums. And Ray says, “I’m a newbie looking to purchase my first rental property and I am in need of some advice. My main goal going into real estate investing is to gain some cashflow so I can scale down, not necessarily quit my day job, which seemed fairly attainable based on the deal analysis on the site and discussions on the BP podcast, but recently I’ve seen several forum posts saying it’s no longer possible to have cashflow and that you’ll be lucky to even break even. Is this true or does it just take more careful planning and knowledge in today’s world? I’ve heard high interest rates are one thing that are hampering cashflow, but my plan was to tap into the equity from our home to cover the first rental, understanding that we could get a better interest rate on a HELOC than with a traditional loan and therefore create more cash flow.
Is that correct? Or does it all depend on the LTV ratio on the HELOC as to how low the interest rate will be? The other option is to withdraw money from our Roth IRAs to pay in cash, which would give us decent cash flow on the first property, but we would still need to finance the second, third, fourth, et cetera, through a HELOC or traditional loan and would then face the same question of whether we can find a deal that gives us some as in two to $300 per month in cashflow. So I’d like to figure out, is cash flow still an option? And if so, what is the best strategy if that’s my goal? Great question. And I feel like there are probably a lot of people listening right now who are thinking about investing in real estate, but are hesitant for a lot of the same reasons that Ray just said.
They’re just hearing a lot of chatter about what real estate investing looks like today. I think first is maybe just have like a quick history lesson and then Ash, we can both give our take. Interest rates are high right now, right? A lot higher than what they’ve been in my adult life. And I think a lot of folks, even when BP got started, like BP got started right around the Great Depression. And there were a lot of folks who were investing when it was probably one of the best times in the history of mankind to invest in real estate. But even as the market stabilized and before COVID, it was still a good time. There are unique challenges today. Inventory is constrained in a lot of places that’s pushing prices higher in a lot of places and interest rates are making it more difficult. That said, I think anytime that we make blanket statements about real estate investing everywhere across every strategy, it becomes a lot harder to say things that are actually true.
And while some markets and some strategies, maybe it is difficult or maybe impossible to cash flow, there are definitely markets and opportunities and strategies that still work. And I’ll give a quick example. I was just talking to a real estate investor last week and she’s based on the East Coast and Jersey, but she buys duplexes in Philadelphia and her strategy is burring duplexes in Philadelphia and then putting in Section eight tenants. And she said her average cashflow across those deals, even for deals she’s buying today, is about a thousand bucks per month. A thousand bucks per month on a duplex in a C class neighborhood in Philadelphia. So the question isn’t, does it work or can I get cashflow? The question is, what market should I be focused on? What strategy should I be focused on? What niche should I be in? And it’s the combination of those things that I think will help you find the cashflow.
So that’s my initial take. Ash, what are your thoughts?

Ashley:
Yeah, I think the combination is key as far as not only your market, things like that and the property type, but also what other benefits you can get with real estate. Because I think a big comparison right now is, should I invest in real estate? Should I invest in the stock market? And you’re not going to get the same benefits like tax benefits, tax advantages, appreciation, things like that that you would with the stock market. You’re just going to get the value of the stock price going up, or maybe you’ll get dividends, things like that. But real estate has its own specific benefits. So first, outweigh what other things are important to you. So if you want to reduce your taxable income, real estate may be a better option for you than the stock market, even if you could get the same return on either one.
So I think those are two major investments that you could be looking at to choose between. And I think you have to look at not only the performance in the long run, but also look at the other benefits that you can get from either one. And I like real estate because I believe it has more benefits that benefit me right now in my journey. I want to hold properties for a long time and then sell them way down the road. I want to get the tax benefits right now to decrease my income and keep more money in my pocket now. So I think looking at that is really important too, is what other benefits do you have? Your tenants paying down your mortgage, you’re not even paying for the property, appreciation, building that equity in the property, and then just the tax benefits that rental income is tax different than W2 income and being able to use things like the short-term rental loophole or doing cost segregation studies on a long-term rental or short-term rental.
And also being able to get that real estate professional status for you or maybe your spouse to really be able to decrease your taxable income. So that’s something I think you also need to consider when looking at real estate as to like, oh, this is only going to cashflow $300 a month, but what if that same exact property could actually decrease you not having to pay $20,000 in taxes that year? That’s almost a little over $1,000 a month that you’re keeping back into your pocket that you’re not paying into taxes. And that’s the one thing that took me a long time to realize is this benefit besides just cash flow. So I think take that into consideration too as to how much money overall can you keep in your pocket.

Tony:
Ash, how have your maybe expectations around cashflow shifted from when you first started investing to today? Because I think that’s a big part of it too. It’s just like having realistic expectations around what’s here. So yeah, how has that shifted for you?

Ashley:
Yeah, cashflow is everything. Cashflow is king. Cashflow is how I was going to quit my job. Cashflow is how I was paying off my student loans. And for a while it worked. It was great. But I realized some of the really great cashflowing properties were headache properties. They were like in class C areas and they needed a ton of just attention. There were headaches, a lot of turnover, things like that. And I realized over time that yes, cashflow is really good and you should not ignore it and you should not buy a cashflow negative property, but there are so many other benefits. I feel like one day where I just looked at this property I bought in 2017 for $143,000 and looked at what the rents were when I bought it compared to how much I had been able to increase the rents over the years and then what the value of that property was now.
I could probably sell that property for 250 to $300,000. The tenants have paid the mortgage down to like 95,000. I had put, I think like a 25,000 down payment maybe on it, maybe 30,000. And just looking at if I sold that property now, how much money I would get, how much I’m cash flowing on that property. So really, I was in shock when I had that realization one day, like the aha moment of like, wow, those 10 years, eight years went really, really fast. And now it’s like, okay, if I keep doing that, there’s so much more value than just the cash flow. So again, the cashflow built my strong, steady foundation, and now I can focus more on that appreciation and long-term gain too for the properties. What about you,

Tony:
Tony? Yeah, I think for me, just my expectations around the type of cash flow that we can get today has definitely shifted. If you go back to like on my wife and I, we have a YouTube channel of Real Estate Robinsons, and if you go back and you watch some of those earlier videos and we talk about the types of deals we were looking at buying, we typically, there’s a 1% rule, the 2% rule in the long-term rental space. And I had like a 30% rule where it’s like, man, if I can get my annual revenue to be at least 30% of the purchase price and it’s a really good deal. So if I bought a house for round numbers sake, let’s say I buy a house for $100,000, if I can do $30,000 in an annual revenue, then it’s a good deal or a million dollar property does 300K, it’s a good deal.
Today, that number’s probably closer to like 15 to 20%, and it’s because rates have effectively doubled since I bought my first short-term rental, right? So that means that we’ve got to see the returns probably go down a little bit as well. So I think the question isn’t, should I be investing in real estate or should I not be? The question is, what is the best way for me to do it today? And we interviewed That Win and James Daynard as two investors who have been doing this for decades and they both echo the same exact thought. The people who say now is not a good time to buy are people who are probably never going to get started because there’s always a reason or some data point that you can point to to say, now it’s not the right time to buy. But it’s the people who understand that every time it’s the right time to buy, it’s just adjusting your strategy and adjusting your expectations is how you continue to get ahead.
So I get the fear guys and I get the hesitation, but you’ve got to be able to separate who you’re taking advice from. And if the folks who are telling you don’t buy real estate are people who’ve never bought real estate or maybe people who have done it without the proper guidance and education and they’re not really part of the BiggerPockets ecosystem and they’re not actively doing this, you got to kind of filter that advice out. So yes, now is still a good time to do it. You just got to figure out the right way to do it.

Ashley:
So if you can’t make the math work yet, what if your day job was your turning ground? After the break, we’ll talk about which jobs actually teach you to invest smarter. We’ll be right back. Okay. Welcome back. Our next question is from Taylor and the BP Forums. I’m a brand new investor with little to no real estate experience. My wife and I are moving back to Birmingham this summer and I am planning to invest in real estate when we do. In your opinion, what is the best job that will teach me the skills necessary to be a real estate investor? Little background, my wife is a high income professional in the medical field and I am an educator. Our plan is for me to leave the teaching field and invest in real estate full-time when we return to Birmingham this summer. I don’t have any work experience in real estate, but I started reading and trying to learn what I could back in 2020.
I’ve read a few of Brandon Turner’s books and a few others about five or six in total. So I would like to obtain a job in real estate where I could work full-time while we begin buying rentals. Our initial strategy is to buy single family homes who are buying hold long-term rentals in or around Birmingham. We are looking at buying at least one home per year for the next 10 to 15 years. I assume our plan can and will evolve over time as we are interested in small multifamily as well. So back to my question, what would be the best job for me to gain valuable experience? After a little online research, it seems something in acquisition so that I can learn to analyze deals or property management so that I can learn the day-to-day operations. What would be the best position thoughts? I actually have a hot take on this, I

Tony:
Think. Yeah. Ooh, Ashley’s got a hot take. We need like a hot take sound effect or something. What’s the hot take?

Ashley:
I don’t think that’s what you should be concerned about. I don’t think that you should worry about that. I think you should take the highest paying job to increase your income, to increase the amount of money you have to invest in real estate, and also that gives you the time to invest in real estate. So I would say being a teacher, okay, if you were to keep a teaching job, teachers can be well paid. I will say it’s not the highest paying job for the amount of work that they have to do, but you’re working school hours, you’re getting vacation days off, you’re over holidays, you’re off during the summers. So if that is like a better paying job than working at a property management company where you’re working 40 hours a week for the whole time throughout the year, maybe keeping a teaching job is actually the better solution for you.
So I think the reason I think that is because you don’t need to learn a skillset to actually invest. I do think it is very valuable to get paid to learn. That is how I started. I worked as a property manager, foreign investor, and I learned everything and definitely gave me the confidence, but I don’t think that you need to do that or that it’s going to set you apart than someone who isn’t doing that. I think you are still as capable of learning everything online at your home without actually physically working that job. If you are set on getting a job that’s in real estate, I would say not a real estate agent. It’s not consistent enough. You’re going to most likely be 1099. It’s not going to help you get loans for investment properties. Property management, unless you’re in a lot of states, if you’re not a licensed real estate agent, you can’t actually be like a property manager, but working in the office, you’ll have access to the lease documents, things like that.
What I would suggest instead, instead of getting like a full-time job, I met someone who went and worked as one of the, I can’t think of what it’s called, but they would like be the person that answered the phone for work orders and assign the work orders to people. And so they’d moved to their full-time job to doing that. What I think what you could do instead is keep your consistent job as a teacher, maybe pick up a shipped a night or on weekends leasing an apartment or doing maintenance on a property. I had met a sheriff before who he, as a part-time job, would do maintenance on properties. The investor that owned the properties would text him, this was before there was great property management software. Text him, here’s the work orders that needs to be done. And then he would schedule them and set up times that worked for him to go and meet the tenants and complete the work orders.
So I would say like if you can get paid more money to switch careers into something that’s like in the property management field, even project management, but usually you need to have some sort of like experience or a project management degree to get into a field like that can be super beneficial, especially if you’re going to be doing rehabs, maybe even in construction, working for a builder or something like that where you’re learning more about the rehab process. But I would say my recommendation would be to keep whatever job is going to be consistent income for you and that you enjoy too. Property management, you just hear complaining all the time is not enjoyable and then try and pick up something on the side or just your part-time job is going to be just shadowing an investor or something, not even get paid to do it.
So I think there’s many other options rather than just like completely switching careers.

Tony:
Asha, I’ll agree with you, but I’ll also disagree with you. And I think the advice you gave, I would agree with for most people, but there’s a caveat to what he said that I think is important. He said, “My wife is a high income professional in the medical field.” So it kind of sounds like his wife is able to hold it all down for like what they need for their life and everything. So I actually do think that in that unique situation, him going and taking a very kind of riskier job in the real estate space might actually be a really good idea. And for me, I feel like most investors, like if I was in his position, I would try and go find the biggest wholesaler in my market and go work for them so I can understand how to build deal pipeline, like how to build my pipeline of deals because whatever strategy you end up wanting to go into, the ability to find a good deal is foundational to being able to execute.
It doesn’t matter if you’re flipping, long term buy and hold, short term, midterm, whatever, name it, you still need a good deal in order for these deals to work. So I think only because he’s got this spouse who’s a high income earner that can, it seems like take care of everything, I would invest all of my extra time, effort, energy into getting really, really good at finding the best deals and then scaling up from there.

Ashley:
If you guys are watching this on YouTube, let us know in the comments which way you would take if you were this person or if you totally disagree with both of us and have your own solution, let us know in the comments.

Tony:
Right. So from your perspective, if you think about all the different pieces that go into like making a real estate transaction happen from acquisition through management and everything in between, for a rookie, which one do you think they should focus on most or first maybe?

Ashley:
That’s a good question. I do think that acquisition piece is important, but I do think like there’s so many investors that are successful that don’t have to acquire property from scratch that you can use a real estate agent to walk you through that process, to find a deal for you, to help you with all that, or you can buy from a wholesaler. So I think it really depends on the person and what their goal is in real estate and what they want to actually get into. I have no interest in going and soliciting off market deals by cold calling or texting or door knocking. So I mean, I wouldn’t take the time to learn how to do that. I’ve sent mailers before. I do a lot of off market deals just from referrals, things like that, but I am not physically out there soliciting deals.
So I think that that makes a big difference, that it’s not useful for me to learn too much into how to spot a motivated seller, things like that. I definitely do think it’s a big thing and probably can propel you and 10X you and get you better deals, but I don’t want to put the time into that. So I don’t know what I … For me, property management definitely was really useful. I think it gave me the confidence of like not being scared of actually managing the tenant and knowing what to do and things like that. But I actually know what … I’m changing my mind. I know it would be the best thing, handyman skillset. That I think would be one of the greatest things if I was getting started, because I think that’s like one of the biggest not feeling confident about doing the rehab on the property, not feeling confident and about getting maintenance things.
So that’s what I would do.

Tony:
I like the handyman idea, but I think your initial point, Ash, is maybe even more important because what you’re basically saying is you’ve got to understand who you are as an individual, where your natural kind of skills and abilities lay, and what do you really want to focus on as you become a real estate investor? Because you’re right, there are successful real estate investors who do just use networking with agents and wholesalers to go out there and find all their deals so they can focus on the other elements. So I guess you’ve got to ask yourself what part of that cycle of a deal do you really want to be focused on and build your expertise in and then probably go do that. So yeah, it’s a great point, Ash. I guess the answer does kind of vary depending on the unique individual.

Ashley:
And for me, it was property management, but also it’s so easy to hire a property management company. So if you already know you’re going to do that, it’s not worth your time. So maybe asset management is the best answer, knowing how to manage your assets.

Tony:
For me, I’m good at property management, but I don’t like it. I do not like being a property manager. That’s why my wife handles most of the day-to-day in our real estate business, but I do like underwriting deals and kind of building that pipeline and doing that piece first. So yeah, I guess it does kind of depend on where your skillsets lie.

Ashley:
I have to say for short-term rentals, I do not like it either until I finally grew up and got good property management software. And now that I use hospitable, I love it because it does everything for me. So I feel like I’m so accomplished as a host of my rentals now, but literally just because it’s doing everything for me.

Tony:
Shout out to the right tools. So guys, DM me and Ashley on Instagram if you want all the tools that we use, because it makes a big difference in being able to run both of your long-term and your short-term rentals the right way. So there’s plenty of them out

Ashley:
There. And again, if you’re watching on YouTube, tell us your favorite tool for investing because I am obsessed with software, apps, anything that will help me run my business. So I’d love to see what are some of your guys’ favorites. All

Tony:
Right guys, so we talked about where to get started, but what happens when you actually find the deal? At some point you got to pay taxes. So how do you navigate the world of taxes and real estate investor? We’ll cover that right after we’re from today’s show sponsors. All right guys, we are back with our final question of the day. And this one comes from Daniel in the BiggerPockets Forum. And Daniel says, “I’m looking to hire a professional to help me with my taxes this year. I’ve always done them myself, but I fear I’m leaving money on the table. I have W2 income and I own three properties, all long-term rentals that I’ve had for a few years.” Are there any questions that I should be sure to ask or anything that maybe you wish you had asked sooner? Looking forward to hearing from you guys.
All right, this is a great question and we are recording this right at the end of the year, but this will release the beginning of the year. This is actually a great time to talk about taxes because I think a lot of people wait until that spring deadline to start thinking about taxes, but really you should be thinking about taxes on January one for that entire year, not the following year when you’re going to file.
We got our first CPA, not at our first deal, but it was within like the first, I don’t know, 12 months or so because by the time I filed my first tax return as someone who had several properties, I did have a good CPA that I was working with. I think the first thing, and Ashley, let me know if you disagree with this. I think the first thing that you should ask whatever CPA you go work with is what percentage of your clients own real estate? And you don’t want to get into a position where you’re educating your CPA on things like bonus depreciation or cost segregation studies or different deductions you can take as a real estate investor. So for me, I think that would be my first question when I’m going to vet someone as my potential CPA is not do you work with real estate investors, but what percent of your client base right now are in real estate?

Ashley:
I think that’s a great question for any vendor. If you’re looking for an insurance agent, if you’re a real estate agent, how many investors do you work with? I think that’s a great thing. Even contractors, like a contractor that I’ve used a lot, he really only does stuff for investors or he has his own investment properties. So he’s very like conscious that like this is a rental. This isn’t like my dream home and we don’t need to go over the top with finishes and things like that. So really can make a big difference. With using a CPA, I think there is some level of knowledge that you need to have. Of course, you want to hire the right people so you don’t have to learn all of these things, but BiggerPockets does have a couple books on tax strategies for real estate investors by Amanda Hahn and Matt McFarland, which I think are a great read just to like give yourself the basic knowledge.
So that way when you are going to your CPA, you have some knowledge about what they can offer you and also to be able to ask these right questions. So for example, I worked with the CPA for a long time that never ever told me about a cost segregation. Now I know to ask how many cost segregation studies have your clients done in the past year or have you done on their tax return or whatever. I think that just having that basic knowledge of what opportunities, tax loopholes, deductions are out there can really, really help you have that conversation with the CPA to see if they are a right fit because if they don’t know what some of these things are, that’s probably a red flag.

Tony:
I think another one for me to call out is like your entity structure, and it’s good to give advice both from a CPA and an attorney on this one because they’re both trying to optimize for different things, but I’ll give you guys like an example. The first CPA that I hired, we were flipping homes and we were holding real estate and we were doing it all together. And she’s like, “No, no, no, no. You do not want to do that because … ” I can’t even remember the reason, like something about employment taxes or something that’s like you’re getting double tax if you’re running active income through a passive income entity like it doesn’t work. So she encouraged us to split it out. So now, even to this day, we have one entity that we hold all of our real estate in, right? So all of our buy and hold rentals are in one.
Anything that we flip or any of our other active income is in a separate entity and there was a tax advantage to doing that and she was able to share that with me. So I think just sharing with your CPA, what are your current … You’ve got three rentals right now, but are you doing anything active? Do you flip as well? Do you wholesale? Do you have any other active income that you’re doing to make sure that they can give you some insight there? I think another one that’s important too is just like exit strategies, because sometimes maybe you’re thinking about selling a property and just having that conversation with your CPA beforehand so they can give you advice on, “Okay, you bought it for this much, you actually depreciated this much already. If you sell this, here’s what you’re kind of looking at from a tax perspective, but if you 1031 it, then here’s the benefit of doing that.
” So I think just keeping them in the loop about not only where you are today, but what your plans are for the future so they can give you advice on how to make the right moves.

Ashley:
And you can also have two people help you with this, but I know you mentioned the attorney, but also like you don’t have to have one CPA that does everything. You can have a CPA that files your tax return and you could have a different CPA that does your tax planning that helps you with this going forward. So they’re the ones that are really focused on like what moves you need to be making, knowing what you’re going to have happen so they can have you do the right things before the end of the year so that when you do go to file your tax return, you have all of the information that you need for the other CPA to put onto the tax return. And I’ve actually found this to be like cheaper kind of is to like not have the really skilled person do all of it where they’re doing the fine tuning, they’re putting it into a package for me of how this is going to be the best tax strategy.
And then basically I’m giving the other CPA the fill in the blank information on my tax return because that’s what a tax return is. It’s fill in the blank and then each year the tax planner actually reviews, make sure it’s correct, things like that. So that’s another thing too, is you don’t have to rely on just one person. And it really helps having two people because if there is something that one person brings up, you can talk to the other person about and see what actually is the best benefit to you.

Tony:
Yeah, that’s true. That’s actually how we started as well. We had someone for tax strategy and someone else who’s doing the actual preparation for us. And on that note that I think the other question you should ask the CPA as well is like, how often are we meeting throughout the year? Am I just meeting you like the first week of April when I sit down with you to do everything or are we meeting multiple times throughout the year? And ideally, probably like a quarterly cadence I think is good for you and your CPA to meet to make sure that they can stay up to speed on what you’re doing throughout the year and help you plan to make sure that by year end, you’ve done everything within that calendar year to optimize that year’s tax returns. Because if it’s 20 27 and you’re now filing your 2026 taxes, well, if you’re sitting down in April of 27, it’s too late to really change much about 2026.
So the goal is that throughout 2026, throughout that year, you can make those changes, make those decisions that’ll make that tax prep in the next year a lot easier. So I think that’s an important one as well. How often are you guys going to actually meet?

Ashley:
Well, thank you guys so much for joining us today on Ricky Reply. I’m Ashley. He’s Tony, and we’ll see you guys on the next episode.

 

In This Article

President Donald Trump’s plan to stop large investors from buying single-family houses could have far-reaching effects on all real estate investors. Trump said in a Truth Social post on Jan. 7:

“For a very long time, buying and owning a home was considered the pinnacle of the American Dream. It was the reward for working hard and doing the right thing, but now, because of the record-high inflation caused by Joe Biden and the Democrats in Congress, that American Dream is increasingly out of reach for far too many people, especially younger Americans. It is for that reason, and much more, that I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it. People live in homes, not corporations. I will discuss this topic, including further Housing and Affordability proposals, and more, at my speech in Davos in two weeks.” 

While the president’s rationale for banning Wall Street titans from grabbing up suburban single-family homes is that this makes it more difficult for homeowners to find a place to live, there is still enough of a gray area in the information he has given so far to cause concern among investors, large and small.

Does the Ban Apply to Corporations of All Sizes?

From his announcement and his use of the term “large institutional investors,” most news outlets assumed Trump meant Wall Street titans such as Invitation Homes—one of the largest renters of single-family homes in the U.S. and formerly owned by Blackstone, which now owns Tricon Residential, as well as Progress Residential. 

However, corporations can be any size, and by far, the largest owner of single-family homes in the U.S. is not REIT behemoths but smaller, mom-and-pop investors. In his next statement, a clarification of what the president meant by “corporations” would put a lot of people’s minds at rest.

Small Investors Own Most of the Single-Family Homes

According to the Q2 2025 Investor Pulse™ report from BatchData, investors own 20% of U.S. homes, and smaller investors dominate, accounting for 87% of the market share. So, if Trump plans to ban only large-scale Wall Street investors from the single-family housing market, it will likely do little to improve homeowners’ access to housing. However, if he bans all corporations from buying single-family homes, the ramifications would be devastating for mom-and-pop investors.

“A ban could reduce home prices, but the effect would likely be modest, since most investors are small-scale buyers rather than large institutional players,” Thom Malone, principal economist at Cotality, told National Mortgage Professional. He added:

“A decline in investor demand could also slow new construction, offsetting some of the downward pressure on prices. At the same time, rents could rise as reduced supply tightens the rental market, potentially pushing some buyers out of more affluent neighborhoods where homeownership is already out of reach. 

The impact would also vary significantly by location. Atlanta stands out as the only major market where institutional investors account for more than 10% of purchases, making it a place where the policy could have a more noticeable effect. Importantly, this proposal would stop future purchases, not require investors to sell existing homes—an action that would have a far greater impact on the market.”

Wall Street Prefers Build-to-Rent Communities Instead of Scattered Single-Family Homes

Further complicating matters is that the large institutional investors Trump seems to be targeting have recently appeared to cool their interest in single-family homes, pouring cash into build-to-rent communities that benefit from centralized management and ease of operation, rather than scattered portfolios of single-family properties.

The corporate ownership of single-family homes has been a contentious issue for many tenants, who fear rapid price increases and harsh eviction policies. “When institutional investors or larger landlords own the rental units, we see an increase in the number of evictions for tenants,” Ruth Jones Nichols, a former housing official in the Biden administration who now serves as executive vice president of programs at the Local Initiatives Support Corp., told the Wall Street Journal in 2024. “That’s something we really want to keep an eye on.”

In September of the same year, Invitation Homes, then the biggest single-family rental operator in the U.S., was forced to pay the Federal Trade Commission $48 million to settle charges related to misleading rental pricing and unfair evictions.

What the entire real estate industry needs regarding Trump’s social media post is specificity.

“Any policy discussion about limiting large investors in the single?family housing market must account for the essential role responsible private capital plays in restoring aging housing stock and increasing supply,” Linda Hyde, president of the Kansas City-based American Association of Private Lenders (AAPL), told Scotsman Guide. “Private lenders and investors are often the ones who take on distressed properties and return them to livable condition.”

The AAPL encourages a “data?driven approach that expands access to homeownership without unintentionally restricting the investment activity that supports housing availability and community revitalization,” according to Hyde.

The Worst-Case Scenario for Small Investors

A blanket ban on all corporations, large and small, from owning single-family houses for rental purposes would stop many mom-and-pop investors dead in their tracks. Popular investment strategies such as the BRRRR method would no longer be feasible unless practiced on small multifamily buildings. 

Considering Trump’s quote stated he planned to ban “large institutional investors,” it seems to let smaller investors off the hook. But what the president means by “large” is the next question—100 units, 1,000 or more, or another number. A more likely scenario is that smaller investors who own sizable portfolios might have to jump through hoops to acquire more properties.

Like the touted 50-year mortgage, it is unclear whether the president’s latest real estate initiative is more feel-good PR that might not stand up to scrutiny, or a well-thought-out plan to increase supply and thus lower prices. The latter appears to be a stretch unless other aspects—i.e., building new housing on a massive scale—come into play.

Speaking about Trump’s statement, National Association of Mortgage Brokers President Kimber White told Scotsman Guide: 

“This is a start. If it puts 3% of houses on the market, that’s great, because right now we have an affordability crisis, and we have no homes on the market. It’s not a huge fix. Because when you look at the big picture, it’s not going to all of a sudden magically throw this big group of houses on the market.”

Final Thoughts

Clearly, there’s a lot of specificity that needs to be given by the president, principally concerning his meaning of the word “large.” The president has close ties with Wall Street, particularly with Stephen Schwarzman, CEO of the Blackstone Group, one of the large institutional investors the president was clearly referring to. It would go against the president’s M.O. for him to do anything that would hurt the interests of one of his most loyal and powerful supporters.

The knee-jerk reaction from some smaller investors might be one of joy—with no large institutional investors, there’s more room for smaller investors. However, given that small investors already dominate the vast majority of the single-family rental market and larger investors appear to have curtailed their appetite for the asset class, that logic seems flawed.

In This Article

Retail real estate investors are optimistic about investing conditions and are looking to grow,  heading into 2026, according to our BiggerPockets Pulse survey, taken in late 2025.  

Despite a slow and uncertain market in 2025, investor sentiment has improved over the last 12 months, and expectations are high for 2026. Across experience levels and geographic regions, investors see opportunity in the year to come, citing diverse benefits in the current market, such as:

• Lower mortgage rates
• Increased negotiating leverage
• Falling prices
• Better inventory

As such, the vast majority of retail real estate investors are planning for an active year in 2026, prioritizing growth and optimization. 

However, with lower affordability, rising expenses, and oversaturation in certain markets, tactics have to change to make the most of these new opportunities. As an investor, you can learn a lot from what other players in our industry are planning, so read on to find actionable insights about how investors are approaching the coming year from BiggerPockets Pulse.

Investing Conditions

Investor sentiment increased modestly in 2025, with our Pulse Index for the last 12 months measuring 108 (100 is neutral, and anything over 100 is positive).

A modest change in sentiment is the most that anyone could reasonably expect, as the housing market has remained stubbornly unchanged for most of the year. Home sales have ticked up, but by an almost imperceptible amount. Mortgage rates have fallen year over year, but not to a level where it’s materially changing demand. The median sales price is up just 1% to 2% year over year, depending on who you ask—so it’s essentially flat. 

That said, bright spots have started to emerge. Inventory is up, leading to better deal flow and negotiating leverage. With stagnant real price growth and declining interest rates, affordability is starting to improve. Buying conditions are slowly getting better. 

The combined impact of these modest shifts has lifted sentiment, but investors see the bigger changes to fundamentals coming in the near future. Building on the shifting trends of 2025, investor expectations for the next 12 months are optimistic. Our Pulse Index for the next 12 months measures 150, with 50% of investors expecting conditions to either “improve somewhat” or “improve significantly.” 

Only 15% of investors expect conditions to worsen. Of these investors, most are concentrated in the more expensive Northeast and Western regions. 

The causes for optimism are rather broad, as investors cite a variety of expected improvements in investing conditions: 

• Increasing inventory
• Falling prices
• Lower mortgage rates
• Better negotiating leverage 

These expectations are reasonable, in my view, given that positive shifts are already starting to take shape. Prices are falling in over 50% of metros as of this writing, rates have come down by almost 1% since January 2025, inventory is up about 8% YoY, and days on market are up by double digits. 

It’s no wonder that investors with a long-term outlook think fundamentals are shifting for the better. After all, it would be hard for them to get much worse than where we’ve been the last few years. 

Despite cautious optimism about the market, challenges remain. Investors equally cite the three biggest challenges facing retail real estate investors:

• Lack of capital for new deals
• Difficulty finding new deals
• Rising expenses

When you look at the data by experience level, you see that newer investors are unsurprisingly worried about capital-constrained slowing growth. This is often the reality of starting an investing career, regardless of external market conditions. 

Meanwhile, experienced investors are increasingly concerned about rising expenses, including insurance and taxes. Interestingly, no group seems particularly worried about falling home prices or stagnant rents.

Even though sentiment is improving, the reality is that short-term market conditions remain uncertain, and investors are increasingly focused on tried-and-true strategies that emphasize long-term returns. More than 50% of investors believe long-term rentals are the best option going forward, while 1 in 5 investors believe owner-occupied tactics like house hacking and live-in-flips will work best. 

Investor enthusiasm for tactics that have shown success in recent years, such as short-term rentals (STRs) and mid-term rentals (MTRs), has waned significantly, though newer investors still show some interest—likely due to their increased cash flow potential. 

With many metros seeing price corrections, trust in house flipping is low, with only 9% of investors with two to five properties preferring this strategy. However, flipping interest does increase as investors gain experience. 

Given the expected improvement in investing conditions, the majority of investors (57%) intend to focus on portfolio growth in the coming year. A quarter of investors plan to focus on optimizing their existing portfolio, while less than 3% intend to downsize—all signals that retail real estate investors are focused on the long-term benefits of real estate investing far more than short-term returns. 

2026 Forecasts

Heading into 2026, retail real estate investors are almost perfectly split over the direction of the housing market. The only clear consensus is that prices won’t move significantly in either direction. Only 3% of investors expect above-average appreciation of more than 5%, and similarly, only 5% of investors expect declines to surpass 5%. 

Investor opinions about national home prices do seem to be influenced by the investor’s home market, however. Regions that have shown resilient appreciation rates in recent years, the Midwest and Northeast, are more likely to expect the national market to move up. Meanwhile, the South and West, which hold the majority of the markets seeing corrections, are more likely to see declines continuing. 

Investors are somewhat more optimistic in their expectations for mortgage rates to fall in the coming years. Indeed, 48% of respondents expect rates to drop below 6% from their current range of 6% to 6.49%, while 35% expect rates to stay flat, and 21% think rates will increase. 

Despite tepid rent growth over the last year, investors are expecting rent growth to remain positive in 2026. Investors in the Midwest, having seen strong rent growth for several straight years, are the most optimistic about continued rent increases, but very few expect the outsized rent growth of more than 5% year over year to continue into 2026. 

Current Events 

Beyond the housing market, investors are watching what’s happening with national macroeconomic trends and expect to factor these trends into their investing decisions in the coming year.

Generally speaking, investors have a negative view of macroeconomic conditions right now. Nearly 50% are concerned about the labor market, while only 16% have a positive view of employment conditions. And 42% of respondents feel tariffs will negatively impact their portfolios in the next 12 months, while only 4% expect a positive impact. In the meantime, 95% of investors think inflation is a concern going into the next year. 

But despite these concerns, macro conditions are not the main factor guiding investing decisions for real estate investors. Less than 30% of investors say macro conditions will play a big role in their decision-making in the coming year.  Experienced investors are even less concerned about the national economy (22% of those surveyed), and seem more inclined to focus on the details of their portfolios, while new investors are more inclined to change tactics based on macro trends. 

Of all the questions asked in the survey, one stood out as having the broadest consensus: Investors do not like the idea of a 50-year mortgage. More than 60% have a negative view of the idea, with only 13% supporting a potential 50-year mortgage. 

We’ve yet to hear any updates on whether a 50-year mortgage is coming our way, but it seems safe to say most investors will pass on it, even if it does become available.

Conclusion

As investors turn the page on a stagnant and transitional 2025, most are looking forward to better investing conditions in the year to come. Falling prices, improved inventory, and better deal flow can all be a boon to the many long-term-focused investors who are seeking to grow their portfolio in 2026. 

If you’re interested in reading the full report, click here!

How does the general sentiment of the BiggerPockets community stack up to your own feelings? Let us know in the comments section. 

About the survey

BiggerPockets is a community of retail real estate investors, with over 3 million members, who in aggregate make up the largest bloc of residential property investors in the United States. The BiggerPockets Pulse is a quarterly survey that measures and shares the sentiment and intended behavior of this important economic force. 

Dave:
Investors are optimistic and the market is starting to look better and better as we head into 2026. From improved affordability to better inventory, conditions are right for investors who are looking to grow this year. And on this episode of On the Market, I’m sharing the trends you got to understand to be able to spot opportunities in this improving market. Hello everyone and welcome to On the Market. I’m Dave Meyer. It is our first news show here in 2026, and I am happy to say that we have a lot of positivity to start the year. You know when I actually sit down to create these shows and do all the research and look at the news, I don’t approach it with some particular angle or story that I’m trying to tell. I hope you all know that I pretty regularly share when I’m skeptical or nervous about things, but as I sat down to do my research this week, I saw a lot of exciting, positive things that got me pumped as a real estate investor and I’m going to share them with you today.
We’ve got three primary stories to go over. First, I’m going to talk about how real estate investors are planning for 2026. We have some new data that shows how people, just like you and me, are planning to approach 2026, where they see the big opportunities, where they see the biggest risks and challenges. And this new data provides some really valuable insights that I think everyone listening can use in their own investing and their own businesses. Next, after that, we’ll talk about the big roadblock in the market, which you probably know by now is affordability. And we have some news there that I think will surprise you and I’m excited to share. And then lastly, we’re going to talk about inventory and I’m actually going to share forecasts from a couple of experts who pretty much nailed it, like incredibly accurate forecast for 2025. I’ll share with you their predictions for inventory in 2026 and talk about what the implications are for that because as you know, the way inventory goes, so goes the housing market.
So we’re going to get into that as well. Let’s do it. So first up, we’re going to talk about investor sentiment and the way that residential real estate investors, people just like you and me are planning their portfolios, what they’re worried about, what they’re excited about, the decisions that they’re going to make. And this is a new data set we have. And I’m excited to share it because I think it’s going to help you all understand how our particular community, this very specific group of people who listen to this show are thinking about investing. Because all that news that I was just talking about, it’s not necessarily wrong or bad, but unless you’re listening to BiggerPockets or some other relevant news source, it’s not really relevant to you. Zillow puts out data, but they’re talking about home buyers. So does realtors, so does Compass. All these companies, they put out great information, but the sentiment for a home buyer is different from a real estate investor.
And so what we did at BiggerPockets is we decided to go out and get that data because we have a community of over three million investors. So what better place to sort of mine data and insights from than our community. We wanted to understand what are their plans, how are they planning to invest, what they’re excited about. So that’s what we did. We put out the survey just a couple of weeks ago and I’m excited to share this with you. I’ll start with the big headline. The big news is that investors are optimistic. They are very much feeling that conditions are improving for real estate investing and will continue to do so in 2026. Now you might be thinking, of course, it’s bigger pockets. It’s real estate investors. Of course, they’re excited. This is not really how it’s always been. We actually asked two questions.
First we asked, how was the last year for you? How are you feeling about it? And I am a huge dork, so I made an index and quantified it and came up with a score and 100 is neutral. So if the score was 100, half the people will feel good, half the people will feel bad. And when we ask people how investing conditions have been over the last year, it was just 108. So a little bit positive, but nothing exciting. But when you ask people about how things are going to be in the coming year, the index shoots up to 1150. People are starting to see shifts, particularly in the South. I actually, I was curious. So I like broke down the results. And it seems even though everyone is super optimistic right now, people in the South are the most optimistic and are noticing shifts, which is good because the South has been struggling a little bit and we haven’t seen as much activity there.
But across the board, people are feeling and seeing that conditions are getting better and it’s not just some general optimism. They are actually citing very specific reason, data, things that they’re seeing in the market. In our survey, we asked why are people optimistic if they are? And the reasons are actually broad. And to me, this is really good. The fact that people are citing multiple different market conditions that make their lives as real estate investors, their potential for new deals go up, it’s multiple things. It’s not just one thing. And that to me is pretty important because to be honest, if people were just like, “I’m excited about this next year of real estate investing because the Fed’s going to cut rates and blah, blah, blah.” If that was what people were saying, I would probably just roll my eyes and ignore it because we know that that is not really going to make conditions better as we’ve seen for the last couple of years.
But investors are citing real trends that are reflected in data, not speculation for why they are more optimistic. So yes, one thing that people are looking for is mortgage rates, but with almost equal excitement, people are looking at increasing inventory and better deal flow. We’re going to talk about that more when we talk about inventory later in the episode, because this is what I am more excited about. I am seeing better inventory and deals than I have in at least two or three years, maybe even longer. People are excited about their ability to negotiate. A lot of people cited this, that they’re able to get better deals right now because sellers don’t have the same power that they have had over buyers over the last couple of years. We’re also seeing falling prices as one of the things that people are excited about, meaning that they’re able to buy better assets at better prices, which is a good reason to be excited.
So what encouraged me about this is not just naive optimism. It’s actually pointing out real things that are happening in the market. And these expectations for these benefits are reasonable, in my view, given that the positive shifts, the stuff that people are talking about, it’s already starting to happen. Prices are falling. In over 50% of metros, we’ve already started to see this. Rates, I know people aren’t excited about rates. They’ve come down almost a full percentage point from where we were a year ago. If you go back to January of 2025, rates were at 7.2. Now they’re at 6.2. Now, I know that’s not great compared to where we were during the pandemic, but that’s pretty darn close to the long-term average for the 30-year fixed rate mortgage, and that makes more deals pencil. One percentage point, that changes underwriting for a lot of deals.
We also see inventory up eight to 10%, and days on market are up by double digits. All of these things give me confidence that investing conditions are going to get better. And so it’s no wonder that other investors are feeling the same way, and that people who have a long-term outlook are seeing that fundamentals are shifting favorably. And for the reasons I just mentioned, it makes sense. It also makes sense because it would kind of be hard for them to get much worse than where we have bid over the last couple of years with terrible affordability and low inventory and all of that. So yes, it is getting better, but it has been a long slog to get here. Now, I mentioned that the people who are most optimistic who are people who are looking at this long term, and that makes sense to me because real estate is always a long-term game.
That’s my personal opinion about it. Sure, if you’re a flipper, it’s much more short-term. But if you’re trying to build a long-term portfolio, if you’re trying to pursue financial freedom, it’s really about what the market can return you in five, 10, 15 years. It’s really not about what’s going to happen in the next two or three years. And so when you get better buying conditions, when you’re able to buy things at cheaper prices and better locations, that’s good for the long-term investor. And when we asked our community of real estate investors, what’s the best strategy for 2026? We love to debate this on the market. And James will probably always say flipping. Henry might say flipping. Kathy will probably say new development. But the bigger pockets community is resoundingly just saying long-term rentals. That’s by far the biggest. Nearly 60% of investors are saying long-term rentals, not including house hacking.
So this is just buying properties and renting them out. This includes Burr, rent by the room, whether you buy it turnkey, but you buy an asset, rent it out, hold onto it. Pretty much everyone agrees. The second highest was owner-occupied, always a great strategy, and flipping came in third. Now, I want to just call out that midterm rentals and short-term rentals have become very unpopular, at least as the primary strategy. So when we look at mid-term rentals, newbies, people who haven’t even done their first deal yet or maybe have one deal, about 10% of them are interested in it. But what’s really interesting is as you get more sophisticated, people who own six to 10, 11 plus, which is kind of how we broke down the survey, there’s almost no interest in either midterm rentals and short-term rentals. It’s interesting, right? I wonder why that is.
I think what happens with a lot of investors, this happened to me, is in the beginning of your investing career, you focus a lot on cash flow because you just don’t want to screw up and you’re like, “I got to maximize cashflow.” And so when you’re in that mindset, short-term rentals and mid-term rentals make sense. But once you get a couple of deals under your bet, most people realize, “You know what? I don’t need cashflow right now. What I need is to buy the best assets and just hold onto them for as long as possible.” And I don’t want the additional sort of management burden that comes with short-term and mid-term rentals. I also think that both of those markets have become very saturated over the last couple of years and are far less profitable than they used to be. And so just wanted to share that with you because do what you will.
I’m sure there are still great short-term rental operators out there, great mid-term rental operators out there, but broadly in the BiggerPockets community, people think just tried and true kind of boring investing strategies are what’s going to work best in 2026. Now, of course, not everything is rosy. There are still very significant challenges in the current market and people are citing a lot of different things, but I was actually kind of surprised by the response because the options that we gave were high mortgage rates, lack of capital for new deals, difficult finding good deals, rising expenses, declining home prices, flat or falling rent prices. The number one thing that people said by a margin is rising expenses. I get it. I mean, insurance has gone up, maintenance has gone up, taxes have gone up, and this is eating into a lot of deals. And when you combine that with the flat or falling rent prices, that’s where you’re seeing margins get compressed.
And so I’m not surprised to see that. And that’s something that every investor needs to be keeping an eye out. We’ve done some shows on the BiggerPockets podcast about how to control expenses, but that is something even in these improving market conditions, that’s going to be a challenge. Expenses are killing a lot of deals. And so short answer, just be really conservative in your underwriting with your expenses. Don’t look for best case scenarios. Assume your taxes are going to go up and assume your insurance premiums are going to go up. That’s the best way to protect yourself, but you got to kind of have that mindset. It’s funny to me that high mortgage rates are actually only the fourth highest answer here. So people are getting over it. And I’m glad to hear that because 6.2, 6.5, you can work with that. There are deals that work with that.
So I’m glad to see that people are not being discouraged by high mortgage rates, that instead they are discouraged by the fundamentals of the deal, which is good, right? It might be hard to find good deals in this market. You’re going to have to underwrite a lot of deals before you find good ones, and there’s going to be expenses are going to kill a lot of deals. But if you have that mindset of conservative underwriting and taking what the market is giving you, you’re going to be able to find good deals. I am sure of that in this market. So I’m not trying to say everything is perfect. There are definitely challenges, but despite these challenges, investors are planning to buy and grow. And if you want to download the whole survey, it’s for free. We’ll put in the show notes, you can look at the rest of it.
There’s a lot of interesting information about specifics, about different markets, different regions of the country. We have all that. You can go get that. But the last thing I’ll share with you today before we move on is that we asked people, what is your main priority for your portfolio in the next 12 months? And nearly 60% of people said to build and to grow. And I love hearing that because that’s the kind of mindset that investors should have right now. When market conditions shift, when you go from a seller’s market to a buyer’s market, that’s when it’s time to acquire. Not every deal’s going to work, but having the intention to go out and grow can really be beneficial right now. That was number one. The second one was optimize existing portfolio, another great thing to be doing in your market right now, but only 4% of people said they were selling.
So I just want to keep that in mind because a lot of times I see this on social media, investors are selling, they’re getting out of the market. I just don’t think that’s true. Like maybe some hedge funds are selling some properties, but not at any scale, right? Inventory growth is actually going down right now. We’ll talk about that in a minute. But in our neck of the world, in the world of retail real estate investors, which own 90% of rentals, by the way, I know a lot of people like to say that Wall Street owns all the rentals. Actually, it’s people like you and me who own the majority of rentals. Only 4% of them are planning to sell. So even despite all the challenges, despite everything that’s going on, people are still seeing the long-term value in real estate investing and are still planning to grow here in 2026.
All right. So I wanted to share that with you because I found it super encouraging. I honestly didn’t know how the survey was going to come out if people were going to be really happy, negative, down on real estate, but I’ve been feeling optimistic. I’ve been sharing that on the show over the last couple months. And it was encouraging to see that our massive community at BiggerPockets. We are the biggest group of real estate investors in the world, as far as I know. And this group is still excited about real estate and plans to make deals work in 2026, and I hope you’re one of them. We got to take a quick break, but when we come back, I’m going to share some other great news that I’ve been seeing about affordability. Stick with us.
Welcome back to On The Market. I’m Dave Meyer doing our first news show here in 2026. Before the break, I shared news that we at BiggerPockets created with our new BP Pulse sentiment survey. Now let’s move on to talking about affordability. If you’re a regular listener to the show, you know that affordability is the problem with the real estate market. I have been saying this, and this has sort of been my thesis about the housing market for four years now, that where affordability goes, the housing market will go. And I’ve been saying it for three or four years. I’m sorry if you’ve been listening all that time and you’re getting bored of me saying it over and over again, but I’m sticking with it because it has been correct so far and I still believe it. And affordability just stinks right now. We just kind of have to admit that it is close to the lows that the last time we saw affordability this low was in the early 1980s, but the good news is that beneath that frustrating reality and all the headlines that you hear about affordability, affordability is improving.
I know not everyone’s saying that. The news that you hear, the headlines that you’re seeing is affordability is still bad, and it is bad by historical standards, but there is a positive story. Five months in a row, affordability has improved. And to me, again, another reason to be excited and optimistic. We still have a very long way to go. Don’t get me wrong, we are not really close to what would be considered a quote unquote affordable market, but we got to bottom out somewhere, right? We talk about this with a lot of trends and data and analytics, right? It’s like it doesn’t have to turn around all at once. People expect data to move in these dramatic ways, not usually how it happens. You bottom out. A lot of people don’t even notice that you bought them out, and it just starts to creep in the other direction.
And that is what we’re seeing with affordability. And sure, we don’t know if that’s going to continue, but if I had to guess, if I was to make a prediction about this, I think affordability is going to continue to improve in 2026. In real estate, affordability is a pretty specific definition, and it really is sort of this three-legged stool. It’s made up of three different things. Home prices, right? How much does it cost to buy a home? Mortgage rates, because 70 plus percent of people use mortgages to go out and buy a home, and it’s made of wages. How much are people earning? You might hear it called household income. And over the last year, all three of these things got better. Mortgage rates went down 1%. That’s a lot in a year. Mortgage rates don’t usually go down 1% in a year, so that is actually significant.
Wages or household income went up one to 2% in real terms. That is above inflation. So inflation was 2.7, 2.8%. And depending on who you ask, real wages went up three and a half, four and a half percent. Let’s just call it four. And so that means that one and a half percent above inflation, meaning that your income now buys more house. You are earning more than the price of houses went up that makes it more affordable. And then third, prices were pretty darn close to flat nationationally, and they were down in some markets. In 53 of the biggest markets, according to Zillow, home prices went down. And so even though none of these things moved dramatically, we didn’t see crazy wage growth. We didn’t see crazy price declines. We saw pretty solid mortgage rates decline, but even without them moving dramatically, the combination of modest improvements leads to better affordability.
That’s all it takes is these three things working together. And it’s really important that none of them are going in the other direction. All three of them are improving. That gets us better affordability. Now, I am not always right, but I do want to call out that on this show, we have been saying that this is exactly what would happen. This would be the path to affordability for like three years now. I have never been pushing the crash narrative or saying that rates were going to come down. I think if you listen to the show regularly, you know, I’ve been trying to caution people and say that I did not think there would be a crash. I did not think that mortgage rates would come down as much as a lot of people saying. But at the same time, I have been saying that affordability is a problem.
Both things can be true. Affordability can be a problem without a crash. And I think that’s what the crash bros are always saying. Affordability stinks. There’s going to be a crash. Not necessarily what can happen, and as we’re seeing what will happen and is happening, is that these three pillars of affordability can slowly get better. And over time, affordability can get back to a more normal level. And that’s exactly what’s happening. And although it is modest and it is just the beginning, that is encouraging to me because this is kind of what you would hope would happen. So five months of improvement, that’s good. I wouldn’t expect that to all of a sudden make huge numbers of deals start to make sense yet, but is the beginning of a trend that will hopefully continue. Rates will hopefully come down a little more this year. There’s reason to think that they’ll at least stay close to where they are and maybe they’ll come down a little bit.
I am getting, frankly, a little worried about wages and they might start getting close to the rate of inflation, but I do think if I had to guess in all probability, they will outpace inflation. And I think prices are going to be down a little bit or flat. I’ve said, I think probably negative 1% for home prices this year, which means maybe not huge gains and affordability over the course of 2026, but modest gains, and I’ll take it. I will take modest gains after the years we’ve been through horrible inventory, horrible affordability. And so seeing things get better makes sense. And again, is another reason we’re seeing, like in the sentiment and when we talk to James and Kathy and Henry and myself, that all of us are starting to feel a bit more optimistic about the prospect of real estate investing heading into 2026.
So clearly I’m excited about better affordability. I think that this is what we need for a more healthy housing market for better investing conditions. For better conditions for average home buyers, just for our country, we need better home affordability, and I’m glad to see that. We have some more good news about inventory, but we got to take one more quick break. We’ll be right back.
Welcome back to On the Market. I’m Dave Meyer. We’re going through our big three news stories for the start of 2026. We’ve talked about investor sentiment. We’ve talked about some surprising and exciting gains in affordability. Next, I want to talk about inventory because inventory matters a lot. We’re going to talk about some forecasts for some really reputable people that just came out about where inventory might go in 2026. And this is important. This stuff really does matter a lot because it’s going to tell us a lot about where the market goes. Between affordability and inventory, we’re going to know a lot about the direction of the housing market. If inventory goes up, that puts downward pressure on prices, right? It means that there are more sellers than buyers, and that gives buyers negotiating power, and it gives sellers less power over price. That’s downward pressure.
The opposite is also true that if inventory goes down, it shifts the power to sellers and it puts upward pressure on housing prices. Now, there are a lot of different forecasts out there, and you are probably going to hear a lot of people on YouTube and social media say that inventory is going through the roof and that that’s the reason we’re going to have a crash worse than 2008 or whatever these people are talking about on a given day. But what I wanted to do was pull together what I consider credible forecasts. And I assure you, I’m not just cherry-picking ones that I agree with. I’m just picking sophisticated organizations that have real data, that have data analysts, that have economists who are professionals at this thing and take pride in their work and are not just saying things to get clicks. So I looked through a bunch of different forecasts and I found people who were right last year, right?
People who were very accurate last year. This is BrightMLS, Compass, and realtor.com. They all had really good forecasts on inventory. So let’s look at what they’re saying for 2026. We’ll start with BrightMLS. This comes from Chief Economist Lisa Sturtevant, and she said that active inventory will go up about 11% in calendar year, 2026, similar to what they predicted last year. They said about 13% last year. So they’re basically saying similar year this year to last year. When you look at Compass, whose chief economist is a guy named Mike Simonson, you might recognize that name. He’s been on this show probably at least four or five times. Frequent guest, great guy, expert at inventory. He started a company called Altos Data that was, I think, maybe the first company to start real time tracking inventory. So this dude knows what he’s talking about. He is saying something similar to what Lisa Sturdivant said, 10% increase.
He says, quote, “We forecast about a 10% inventory growth in 2026. In this next era, supply is finally showing signs of growth in the Northeast and Midwest while the pace of growth in the Sunbelt is moderating. Supply stays sufficient to enable home sales to grow and prevent runaway growth in home sales.” So he’s saying overall similar thing to what they’re saying at Bright MLS. We’re starting to get a consensus here, but what I think is really important, two things in here. One, we’re starting to see growth in inventory in the Northeast and Midwest. That probably means that prices are going to moderate there. Something we’ve been talking about is that I sort of said, I think we’re going to be moving towards the middle, towards flat. Instead of having markets in the Midwest growing at 8% and Austin negative 8%, I think things are going to be a little less dramatic.
We’re going to see places in the Sunbelt start to come closer to zero, which is probably happening. As Mike just said, inventory growth in the Sunbelt is moderating, so that’s probably likely to happen. And all the growth in the Northwest and Midwest doesn’t mean it’s going to stop. It doesn’t mean they’re going to go negative, but it might just be a little more muted as evidenced by the inventory growth in those areas. So I think in line with some of the expectations and predictions that we’ve been making here on this show over the last couple of months. The third thing that I pulled is from realtor.com. They expect US active inventory for sale to rise about 9% in the calendar year. So all three of these are basically pretty similar. They’re all saying somewhere between eight and 11%. So pretty much a consensus among three of the more reputable groups.
But even though they’re similar, there is something notable that maybe not everyone noticed here that I just want to call out. All three of these major forecasters who were spot on in 2025 are forecasting slowing inventory growth. And this is really important because all of them are saying inventory will keep growing, but the amount that it grows will go down because last year we had 10, 11, 12%, depending on who you asked, now it’s eight, nine, 10. Now, that might not sound like that significant of a change. And to most people, if you’re just shopping around for homes, you’re not going to notice that difference. You’re going to see a similar amount of growth in inventory last year to this year, but it does mean two important things. One, better terms for buyers, right? That means there are going to be better options for buyers.
Even though that means prices are probably going to flatten out, I think they might even go down nationally a little bit, but this means more options for real estate investors. As I was talking about earlier, this is where the opportunity lies. You’re going to be able to find better assets, likely in better places, likely for better prices. That is the benefit of rising inventory. And we are going to see more inventory this year over last year, which means there’s just going to be better deal flow. But at the same time, no one is predicting some insane runaway increases in inventory like the crash narrative people are saying that inventory is starting to spiral out of control. And once people start selling, everyone else starts selling, that’s not happening. That’s also just not true. We are seeing that in the South, right? If that was going to happen, wouldn’t inventory in the Southeast, in these markets that are getting hit hard right now, wouldn’t that rate of growth be going up?
We just talked about that it’s going down. It’s going down because sellers are logical and they don’t want to sell into a bad market. And so this is correct. This is what we want to happen. This is what we should expect to happen. In a market that is reverting to the mean is going back to what would be close to normal. You expect inventory to keep growing, but not to be growing like crazy. If it were growing like crazy, that would be a reason for concern, but there is no evidence that that is happening. So we have some consensus, and if these pretty credible forecasters get it right, we’re going to have roughly eight to 10% inventory growth in 2026. A year from now, that means, and if we’re looking at November 2019, we’re actually going to be back above inventory levels from November 2019.
By the way, we’re in January, but data lags a little bit. So November’s the last month that we have data for, but that is really significant, right? We’ve not seen these numbers in six years. So I think that is encouraging. I get that sort of how you interpret that data depends on who you are. Some people might say that it’s bad because inventory is rising and prices might not grow. And that’s true. If you are just an appreciation investor, if you’re a flipper, I would understand why you would think that. But for people who are in it, long-term buy and hold investors, I actually think it means we’re back to, we’re getting closer, if this all comes true. A year from now, we might be back to a relatively normal housing market in terms of inventory. We are slowly after so many years moving back towards inventory level that I think we should want and we should expect.
I got excited this week because when I look at improving inventory and improving affordability, those are good signs for the housing market. That is stuff that we have been wanting to see. We’ve been asking for for three years now, four years, and it is starting to come around. So when you hear that inventory is going up, I just want you to remember that if people are screaming, “Inventory’s going off, the market’s going to crash.” It’s getting back to 2019 levels, right?That’s what would be normal. If you hear someone comparing inventory levels in 2026 to 2022, being like, “It’s gone up 50% You should say good. That should happen. We want that. That is not an emergency. That is good for the housing market. We want inventory to come back. And people I think who are saying otherwise either don’t understand the housing market or probably trying to sell you something.
Now, of course, a crash is always possible. I try and share that all the time here on this show that I try to tell you all what the most likely thing is. That doesn’t mean that a crash is impossible. I would never say that. It’s either five, 10% chance there’s maybe a crash. But it’s not because inventory is going back to 2019 levels. That on its own is not a reason for a crash. There are other things that could, like if demand just for some reason, maybe the labor market implodes or there’s a black swan event, maybe demand just implodes for some reason that could cause a crash. Or if there is forced selling, if we start to see delinquencies go up and foreclosures really start to rise and not rise the way people on social media are saying rise actually well above 2019 levels, then there could be a crash.
But I’m going to say it again that as of right now, there is no evidence, there is no data that says that either of those things is happening at any sort of concerning level. If that changes, I promise you, I will be the first one to tell you. I assure you, I look at this stuff every day. I will tell you if that is happening, but as of right now, not happening, demand is actually up year over year. I should mention that. Demand is up from December 2025. It’s higher than it was in December 2024. So don’t listen to people saying that demand is evaporating, that is not true, and delinquencies right now are stable. So all in all, I think the inventory story is positive right now. I think the affordability story is positive. And hopefully you’re seeing that these are the real reasons why overall real estate investors are starting to feel more optimistic about buying conditions.
They are planning to buy, they’re planning to go out and buy long-term investments, buy great assets at great prices, and I’m planning to do the same thing. But I would love to know what you’re thinking. Are you feeling optimistic, pessimistic about 2026? Let us know in the comments. Thank you so much for listening to this episode. I’m Dave Meyer, and we’ll see you next time for another episode of On the Market.

In This Article

People love to lament that the rich get richer and the poor get poorer. 

There is, of course, some truth there, but not just because “the system is rigged.” For plenty of practical and mindset reasons, savings begets more savings, and wealth begets more wealth. 

Imagine that every dollar in the world was redistributed evenly overnight. In a decade, where would all the money be? I’d argue that almost all of it would be right back where it started, because people either understand how to put money to work, or they don’t. 

Here’s what the financial independence (FI) and “stealth wealth” communities understand about how savings compound. 

Life Insurance Becomes Optional

My wife and I both earn income, and maintain a high savings rate of 45%-50% (it used to be 65%-70% when we lived overseas, alas). 

If one of us kicks the bucket tomorrow, the other would survive just fine financially. That means we can avoid blowing money on life insurance premiums. Read: more money for our savings and investments, rather than inflating insurance corporations’ profits. 

And yes, I realize the “infinite banking” crowd throws a fit about questioning life insurance. But they’re making a strategic financial decision that’s less about needing death benefits than about tax savings and long-term arbitrage. 

Avoid Long-Term Disability Insurance

The same principle applies to long-term disability insurance. We don’t have to pay for it, because if one of us became unable to work and earn, the other partner could cover our family’s living expenses. 

Reach Accredited Investor Status Faster

As an organizer of a co-investing club, I know all too well how many more investment opportunities are available to the wealthy. The faster you reach a $1 million net worth (not including home equity), the sooner you gain access to better investments. These are investments not open to “Joe Sixpack.” 

Granted, in our co-investing club, we go out of our way to vet investments that allow non-accredited investors too. But accredited investors still have far more options. 

Avoid PMI

When you save more money, you can afford to put a 20% down payment on a home. And that means you avoid paying PMI. 

Private mortgage insurance doesn’t help you in the slightest. It protects the lender, not you. It’s literally lost money that you flush away each month. 

Avoid it, and you lower your monthly mortgage payment—which lets you save and invest even more money each month. 

Higher Down Payment, Lower Mortgage Rate

Homebuyers who put down at least 20% also lower their monthly payment by scoring lower mortgage rates. 

Lenders price their loans based on risk. The smaller your down payment, the greater the risk for them, and the more they charge in interest. 

Higher Credit Score, Lower Interest Rates

A high savings rate also keeps your debt utilization ratio low, which improves your credit score. 

And of course, a higher credit score means lower interest rates, not just for your mortgage, but for auto loans, business loans, and every other loan you may one day need to borrow.

Avoid Unnecessary Interest

Less debt means less total interest paid, i.e., less of your money going to line the pockets of lenders. 

High savers don’t pay interest on credit card balances. They pay them off in full each month, so they get all the benefits of credit card rewards and none of the interest cost. 

They often keep their home mortgage in place, knowing that they can earn higher returns on investments than they pay in mortgage interest. But that’s a strategic choice, not a necessity. 

Option for High-Deductible Health Plans and HSAs

My wife and I recently had to decide whether to opt for more expensive health coverage or a high-deductible health plan combined with an HSA. 

We have the luxury of that decision, because we save enough money to cover that high deductible if a health crisis comes our way. A family that doesn’t have money in savings has little choice but to take the more expensive, lower-deductible option. (Of course, many do anyway, but then they’re up the creek if a health crisis hits.)

That leaves them unable to open and fund a health savings account (HSA), which comes with the best tax benefits of any tax-advantaged account in the U.S. You can deduct contributions, the investments compound tax-free, and you pay no taxes on withdrawals. 

Tax Savings With Sheltered Accounts

The more money you save and contribute to tax-advantaged accounts, the more you save on taxes as well. That could mean lowering your tax bill today with traditional accounts, or reducing how much you need to save for retirement by avoiding taxes on withdrawals with a Roth account. 

In 2026, Uncle Sam lets you contribute up to $7,500 to your IRA ($8,600 if you’re over 50). You can also contribute up to $24,500 to a 401(k), or $72,000 for a self-employed 401(k), plus additional catch-up contributions for Americans over 50.

Plus, HSAs let you contribute $4,400 for a single person or $8,750 for a family. I use my HSA as another retirement account, with even better tax benefits and easier withdrawals before 59 1/2. 

But to reduce your tax bill, you need to actually save and invest more of your paycheck. 

Transportation Savings and Health Boost

My wife and I lived without a car for six years when we lived in South America. After moving back to the States a few months ago, we now share one car. We can get away with that because I work remotely, and we live in a walkable area. 

But it comes with other benefits too. Walking and biking around town keeps me healthier than the average American who drives everywhere. That keeps my healthcare costs lower, not just today, but later in my life as well. 

I don’t know who first said, “Biking saves you money and runs on fat. Driving costs you money and makes you fat.” Regardless, I offer that simple quote to anyone who argues, “Poor people can’t afford a healthy lifestyle.” It costs a lot less to ride a bike than drive a car. 

Lower Target for FI and Retirement

The less you spend, the less you need to retire. 

If you follow the 4% Rule and you want to spend $40,000 a year in retirement, you need $1 million. If you want to spend $80,000, you need $2 million. Want to spend $120,000? You need $3 million. 

By spending less and investing more, you reach your target faster. But from there, most early FIers continue working and earning—but doing their own dream work. Because they keep earning, they end up building far more wealth than they originally targeted. 

Upward Social Spiral

You’ve heard it a hundred times: “You are the average of the five people you spend the most time with.” 

When you surround yourself with high achievers, they rub off on you: their greater ambition and work ethic, financial sophistication, and network of people who help boost performance. These are people like business coaches, tax strategists, co-investing club organizers, mastermind organizers, and so on. 

For that matter, many of these high-flyers can help you land better jobs or business opportunities. My own business exploded in growth after I joined a mastermind full of high achievers. 

By saving and building wealth faster, you can increasingly surround yourself with people who will help pull you up to a higher level, rather than hold you down at your baseline. 

The Financial Flywheel

We all know some showoff who earns a huge income, but spends every penny on “looking rich.” They wear the latest fashions, drive a slick car, and live in a posh home. 

But even if you earn $200,000 a year, if you spend $200,001, you’re still getting poorer each year, not richer. Meanwhile, someone earning $100,000 but saving half their income will become a millionaire faster than you can say “keeping up with the Joneses.” (Not literally. But you get the idea.)

As I earn more, I find myself spending more not on things, but on ways to improve myself and my future earning potential. I recently hired a business coach to help me grow my business. I work with an attorney and a CPA team on tax treatment. And I joined a high-end mastermind group to surround myself with ultra-high achievers who hold me accountable and help lift me up. 

Wealth begets more wealth—if you know how to use your savings to save and earn even more money.

Dave:
Today on the BiggerPockets podcast, I have a big exciting announcement.

Henry:
Yes, you do have a big exciting announcement.

Dave:
Hey everyone. I’m Dave Meyer, head of real estate investing at BiggerPockets and the co-host of the BiggerPockets Podcast. And I’m saying co-host because after a year and a half of doing this thing solo, we are finally having a co-host join the show and it is none other than Mr. Henry Washington. Henry, thank you so much for joining the show and welcome and congratulations on officially being the co-host.

Henry:
Thank you so much. I am so excited to be able to be the official co-host. You finally made an honest man out of me.

Dave:
We’ve been talking about this for a very long time. So I’m excited to make this official and I couldn’t be more excited because you are obviously one of the best investors out there. I think we have really complimentary skillsets and can bring different things to the audience. And you’re just a good dude and someone I like hanging out with. So I think this is going to be a lot of fun.

Henry:
I also know it’s going to be a lot of fun. And I mean, I’m just blessed. I’ve been fortunate enough to be around BiggerPockets over the past few years, but even when I first got started with my journey, BiggerPockets is where I turned to to learn how to do this. And so to be able to now go from that to being the co-host and being able to be a voice for more people to learn, this is a dream come true.

Dave:
Well, I’m super excited. We have a lot of fun shows and content planned for all of you in 2026 here on the BiggerPockets Podcast. So today on the show, we are going to give you a little behind the scenes about how we made this decision. Then we’ll talk about what you can expect from the BiggerPockets podcast going forward in 2026. And then we’re going to get into Henry’s incredible investor story. You may have heard bits and pieces of it on the show because Henry’s been on the show before, but we’re going to go into it because it’s super motivational, it’s inspiring, it’s relatable. And I think it’s a great way to kick off our official partnership and for all of you to kick off the year in 2026, because there’s so much good information that you all can take with you for your own investing strategy heading into this year.
So I have been hosting the show for a year and a half now, and I’ve always wanted to co-host, but that’s a big decision. That’s a big commitment. And we took some time and obviously you’ve been on the show, but it just has become more and more clear. Every time you come on the show, I have more fun hosting the show when you’re there. I think the audience has more fun. The guests have more fun.
And so it’s just become really obvious that you are the right person to be on the show right now in 2026.

Henry:
Yeah, man, it’s been super cool just to go on this journey of growing as a podcast host because this is my, I believe, third going on, fourth year, just being involved with BiggerPockets in some capacity. When I was first asked to co-host some episodes back when Brandon left, I just remember how nervous I was. And I remember thinking like, why would anybody want to listen to anything I have to say on this show? And I’ve had to grow a lot as a co-host and a personality. And I think the timing is just kind of perfect.

Dave:
I, in addition to everything you said, really feel confident that you and I, although we have sort of the same long-term vision and sort of big picture philosophy about real estate investing, the stuff we do day-to-day is pretty different. Very different. It’s really different. And I think that’s a great perspective to bring to the audience because I am much more analytical. I do a combination of different types of investing. I have my hands in a lot of different pots. You are all in doing the thing every single day. And I think both are really important and both approaches are representative of the BiggerPockets audience. This is what most of the people listening to this podcast right now are doing. And so I think joining forces, we are really bringing that level of expertise for pretty much the whole BP community.

Henry:
Yeah, no, I agree with you. I think most people are in a position similar to either you or I. And if they aren’t now, they probably were when they got started. And so having a couple of coasts that are representative of the majority of your community, I think can only be helpful because people can learn from our successes, but also learn from our mistakes. I make a lot of mistakes. We all. And I want to be transparent with the audience. I want to talk to you about the things that I screw up. And I want people to just know that we’re just a couple of dudes who happened to buy some houses and they turn out usually to be pretty decent investments. And it changed our lives. And I know that people can learn a lot from hearing about our experiences.

Dave:
If we can do it, anyone can do

Henry:
That. You darn right money.

Dave:
Well, again, man, super excited to have you. I think this is going to be great for the whole BiggerPockets community. Just so you all know what you can expect, we’re not changing up the shows or anything. We’re still going to have three shows a week. We’re still going to be doing investor stories once a week. We’re going to bring you tactics, strategies, conversations, debates once a week. We’ll also be doing economics, market data at least once a week as well. Most of those are going to be Henry and I together. Some of them will be Henry alone. I’ll probably do most of that economic stuff alone to spare you from having to do all that stuff. But you’ll basically just see a lot more of Henry and the same kind of formats that we’ve been sharing with you for the last year and a half.
We’re going to go into Henry’s story. You’ve probably heard bits and pieces about it as he’s been on the show a lot, but I think we should just start from the beginning and talk about where you were in life, sort of mentally and financially when you decided to get into this business.

Henry:
Mentally, I was immature. Financially, I was immature. I didn’t have any financial background, so we didn’t talk about money in my household.

Dave:
As a kid or even with your wife?

Henry:
As a kid. When I got married, that came up. But prior to me getting married, I worked a corporate gig for Walmart. I was designing software. I had great job. I made six figures and because I had no financial education, I was just bad with the money. And so I spent it. I had a bigger apartment than I needed. I had a nicer car than I needed. And so I spent more money than I made essentially. Were

Dave:
You putting on credit cards?

Henry:
I was. I was. I would spend most of my money every couple of weeks, and if I needed more, I’d put it on credit cards or I would eat ramen noodles and McDonald’s dollar menu food until I got paid again. And I didn’t contribute to my 401k. I had no savings. I had about $1,000 in my savings account and I was fine living like that. But as you mentioned, I got married.
And what I quickly learned when I got married was that my wife, Jessica, did not want to eat off the dollar menu toward the end of the pay period until we got paid again. She thought that that was something we shouldn’t do. That was the first time in my life where I started to realize that my poor financial decisions were now impacting somebody other than myself. And it all came to a head when we tried to buy a house together with the American dream, get married, buy a house, have kids. We were going to go down that path. And during the loan process, the banker called me and said, “Hey, if you want your wife to be able to buy a house, you can’t be on the loan. Your credit is bringing down her ability to own a home.” And I literally remember that conversation.
I remember feeling nauseated. I remember just thinking that I’m screwing this up for us. And even though I made more money and I wanted to be this provider, I had this urge to provide for my now new wife and I couldn’t.

Dave:
But you could have. You had the resources to be able to do it, but I mean no offense, but it was your decision you’re making. It wasn’t like your circumstances.

Henry:
That’s what made it feel worse.That’s what made it feel terrible is that it was no one to blame but me. My ignorance about financial education was now costing us the life that I wanted us to have and that she wanted. And so I did remove myself from the loan. She did buy the house and luckily she allowed me to live with her and I thought that was very kind. And not long after that, we’re sitting in bed one night having a conversation about our future. And this is what all young married couples do. You talk about how many kids you want to have and places you want to go on vacation and just visualizing your future life together. Amy, we’re talking about our dream home and what that looks like and where that would be. And I just remember thinking while we were talking, I can’t afford any of that, like a dream home.
I wasn’t on the loan for this home. And now we’re talking about dream homes. And I didn’t want to let her know how scared I was during that conversation, but I was terrified because I was just like, at some point she’s going to realize that I can’t provide her this life
And she’s going to be out the door. And none of that is true.

Dave:
That’s where your brain goes. Yeah. Can imagine you just feel like you want to make your wife’s dreams come true and you didn’t have the maturity, like you said, to provide it at the point.

Henry:
And so that night I had a literal panic attack because I just couldn’t stop thinking about these things. People say the word panic attack or the phrase panic attack all the time. This was legitimate. I woke up just sweating and couldn’t breathe. And I felt like the walls were closing in on me and I didn’t know what else to do. So I just started Googling on my phone how to make extra money. I remember I started Googling side hustles. I started Googling how to make extra money because in my head I was like, the problem is I don’t have enough money. So if I get more money, then everything will be okay. And so I was just like, I’ll just do anything on the side to start making money. And I started finding articles about real estate investing on bigger pockets. Those were all the search results where just people were investing in real estate.
And I started to read through some of the posts and started to watch YouTube videos of people investing in real estate. And I just realized that normal people owned real estate. And before that, I’d never thought about it. I just assumed super rich people or corporations owned real estate. I never had to think about real estate before, but something about it just gave me a peace. I was like, “Oh, if all these people have figured out how to own real estate and change their financial future, I’ll just do that. ” I felt so comfortable with that decision,

Dave:
Which

Henry:
In hindsight is silly.

Dave:
Yeah, it’s wild because there are easier sides. They’re like, there’s easier things to stand up. You could go buy for Uber or something, but what was it about this? Is it kind of like the long-term benefit or what about real estate

Henry:
Hooked you? I don’t know. It almost felt like I was supposed to do it because it’s silly to think about. I had $1,000 in my savings account. I had sub-600 credit score and I was sitting in a house that I couldn’t afford to be on the loan for, and I thought my solution to my money problems would be to buy more

Dave:
Houses. Oh, you got more loans. This is a perfect time to go apply for a loan. But honestly, sometimes it takes a little bit of naivety to get into this. You don’t know what you don’t know. You just throw yourself into it. Clearly something about it inspired you. That is, as your story is evidence of, sometimes the inspiration and the motivation matters more than the facts on the ground of what your financial situation looks

Henry:
Like. Yeah. And I’m not telling people to just go do something stupid. I didn’t do this in a stupid way. What I did at that time at 3:00 in the morning was I made a decision. I remember deciding, I was like, “Oh, I’m going to do this. I’m going to do this. I’m going to figure it out. ” And I had this piece and I went to sleep and I woke up the next morning and I told Jessica, I was like, “We’re going to be real estate investors.” And she kind of- She did that. What you just did, that’s what she did. But in all seriousness, I think that she thought anything that it was better than the trajectory that we were on. And she was like, “All right, well, I had to grandfather own some rental properties. I think this is something that we could do if we put our minds to it.
” And then I started to just surround myself with investors. I didn’t know how to do it. And so in my brain, all I could think was like, there’s got to be people locally doing it. I’ll find who they are and I’ll see if I could just spend time around them. And so that’s when I found real estate meetups. I didn’t know meetups were a thing, but I was just Googling real estate investors in Northwest Arkansas. I found the meetups. I would go to the meetups and I found this community of people who just wanted to help you, which is so weird because most industries like this, people are competitive and they play everything close to the vest and they don’t want to share. But when I went to the first real estate meetup, everybody was like, “Well, how can we help you? ” Yes.
“What do you need? Do you need money? Do you need deals?” I just never expected that. It is

Dave:
Unusual. It is unexpected. That’s a good way to think about it. Even on BiggerPockets, you go on the website, people are just sharing ideas, sharing contacts. It’s a very collaborative community. It was one of, I think, the most underrated parts of real estate. Obviously, the financial returns are great, but it’s fun. And you meet people and you make friends. It gives you a sense of community- Absolutely. … that in other industries I’ve worked in has been completely total opposite. I

Henry:
Just remember coming home from that first meetup and just feeling even more reinforced that this was going to happen because now it wasn’t just me anymore. All these people were wanting to help. And so I started to just make all these friends with these seasoned investors. And I went to every meetup I could. I just wanted more and more of that community. It was intoxicating almost. It was like, I just want to be around this. And that turned out to be super helpful for me because 60 days after that, I got a lead for my first deal and I had no idea how to do it.

Dave:
This story is, I think, very inspiring. You started where a lot of people are, whether it’s exact same situation, but no experience, not a good financial position.This is where a lot of people in the BiggerPockets community start. That enthusiasm, I think, ramps up quickly because there’s so many just positive proof points. So many people have done it, so you know you can do it, but then there’s this hard gap to cross where you translate the excitement, enthusiasm, and long-term goal into like, “All right, now I got to go do something.” I should do anything. I still got the sub-600 credit score. I still don’t have money. So how do you go from enthusiasm to actually getting in the game?

Henry:
That is a great question, which I will be happy to answer right after this break.

Dave:
I love having you here. This is great. I don’t have to even think about it. We’ll be right back. The Cashflow Roadshow is back. Me, Henry, and other BiggerPockets personalities are coming to the Texas area from January 13th to 16th. We’re going to be in Dallas. We’re going to be in Austin. We’re going to Houston, and we have a whole slate of events. We’re definitely going to have meetups. We’re doing our first ever live podcast recording of the BiggerPockets Podcast, and we’re also doing our first ever one-day workshop where Henry and I and other experts are going to be giving you hands-on advice on your personalized strategy. So if you want to join us, which I hope you will, go to biggerpockets.com/texas. You can get all the information and tickets there. Running your real estate business doesn’t have to feel like juggling five different tools.
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Welcome back to the BiggerPockets podcast. I’m here talking to Henry about his story and how he got started. Where we left off, you were going to answer a question I asked you about translating the excitement, the enthusiasm, the long-term vision into doing the thing when you don’t have a lot of resources or experience.

Henry:
Well, one of the things that I just believe in life is that in this world, you get what you give. And if you want something, you need to put it out there that that’s what you want. And so I would just tell people I was a real estate investor, even though I’d never done a deal because I felt like if I didn’t believe this was going to work, then why would anybody else

Dave:
Do it? Look at it. Yeah.

Henry:
And so I got a phone call one day when I was at work from a buddy of mine, good friends with this guy. And he says, “Hey, I heard you’re buying houses.” And I was like, “Yes.”

Dave:
Something’s working.

Henry:
Yes, I am. And he said, “I’ve got to sell my house and I got to sell it in the next 30 days.” He was like, “I’m buying some land for my church and I need X amount of dollars to do that. And I need this loan to be off my record to do that. And I have a drop dead window. So in 30 days, I need this much money. So I’ll sell you my house for $116,000. It’s probably worth 160 to 170,000. I don’t care. As long as I sell it for this, I get the exact amount of money I need to go buy this land from my church, but I need it in 30 days. Can you close in 30 days?” And I’ve been to this guy’s house. I know his house. I know the neighborhood. And so I go, “Yeah.” Just

Dave:
Blind confidence. And then you go, Google, how do I close in 30 days? It’s

Henry:
Literally what I did. This is 100% what I did. And he was like, “All right, well, what do we do? ” And I was like, “Hold on. ” And I literally had to Google, how do you buy a house without a real estate agent? And it was like, “Well, you need to put it under contract.” And then after I Googled what under contract meant, it told me I needed to sign a real estate contract. So then I had to find a real estate contract online. I downloaded it, we signed it and I was under contract for this house. That’s terrible legal advice. Don’t do that. Yeah, don’t do that.

Dave:
But where did the money come from?

Henry:
So we signed the real estate contract and he’s like, “Okay, what do we do now?” And I said, “I don’t know, but I’ll go find out. ” And so we have the contract and it says I’m going to close in 30 days. And I go, “All right, well, I need $116,000. Where am I going to get $116,000?” And I said, “I’ll call a bank. Banks give loans for homes. I’ll just go to a bank and I’ll ask them what’s the process to get a loan to buy this home.” So that was my thought process. So on my lunch break at work, I took that contract to one of the closest banks to my office. I figured I’d just start there. I walked in with the contract. I had $1,000 in my savings account. So I walked in needing $115,000. I walked into this bank and it happened to be a community bank, which I didn’t know walking into it.
And the guy standing in the lobby happened to be the commercial loan officer. He was just standing. I didn’t ask for him, but when I walked in, he asked could he help me. And I was like, “Yes, I’m looking for somebody to help me purchase this home.” And I literally handed him the contract. He looked at the address and he was like, “Come back to my office.” And he put it in his computer and he was like, “This house is probably worth a lot more than this. ” And I was like, “Yes, got to do it. It’s this. That’s why I would like to buy it. ” And he was like, “Well, what we do is commercial loans. Does it need work?” And I was like, “Yeah, I think it needs some work. There’s somebody living in it, but I don’t think it’s in the best shape.” And he was like, “Well, the way our loans would work is we would loan you 85% of the purchase price.
You would have to bring a 15% down payment and we’d give you 100% of the renovation costs.” And I was like, “Oh, that’s awesome.” He was like, “So you have the 15% down payment?” And I was like, “Yes, I do.
” I did not have the money, but I wasn’t going to tell him that. And most people would’ve seen that as a stopping point to say, “Okay, well, I don’t have … ” It was like 20 grand at that time, but I was excited because I walked in the bank needing $115,000 and I walked out only needing about $19,000. Just got

Dave:
95.

Henry:
So I am almost there, plus I have renovation money that I didn’t think I would get. And so I then had to figure out where to get the rest of this $19,000 from. And so I leaned on this community of investors who I’d been building a relationship with over the past 60 days with going to these meetups. And I called three or four different ones and brainstormed all these ideas to get the down payment. And I remember I finally called my buddy because I couldn’t find the money after about a couple of weeks. And I said, “Hey, I have this deal. It’s a good deal. I told my buddy I’d buy it. He’s in a pinch. Can you buy it because it’s a good deal and I don’t want to let him down.” And he was like, “Henry, I would buy this deal.” I was like, “But if you are going to be a successful investor, you need to figure it out.
” And he sat there on the phone with me and just rattled off ideas and we ended up landing. He was like, “Dude, just use your 401k.” And I was like, “How does that work?” And he was like, “Well, yeah, you can borrow against your 401k.” And I was like, “Well, I don’t want to cash out my 401k. You got to pay penalties and fees.” I was like, “No, no, you can borrow against it. Your employer will typically let you borrow a percentage of what you have saved up in your 401k. You pay it back with interest, but the interest is yours because it’s your money. So you’re actually paying yourself back with interest. If you buy this property and rent it out, technically your tenant’s going to pay the mortgage and be paying back your 401k loan.” And I was like, “That’s a brilliant idea.
I didn’t know that was an option available to me. I just got to find a 401k.”

Dave:
Yeah. I thought you were saying we had

Henry:
It- I did not

Dave:
Have one. Okay.

Henry:
But my wife did.

Dave:
Oh, nice.

Henry:
Yes. And so I went to her and I said, “I think we need to borrow 20 grand from your 401k for us to buy this rental property.” And she said yes, almost immediately without a doubt, without a thought, she was like, “Yeah, let’s do it. ” We had the money in a week and some change. We closed on the house. We kept the tenant in it. We put the rents closer to market rents and it started to pay for itself and pay for the loan and pay us back and put a little bit of money, a cash flowing off pocket at the end of the month. And that was the proof of concept that this worked. But right after that, the bank called me and they said, “You should take out a line of credit on the equity for this- ”

Dave:
You’re walking into 50 grand, right?

Henry:
Yeah. And I was like, “Cool, what’s that? ” And so he walked me through what the line of credit was. He walked me through that process. I got access. I ended up getting access to almost $30,000 on a line of

Dave:
Credit.

Henry:
And not 90 days before that, I was having a panic attack about how I was going to take care of my family financially, and now I knew I had found the thing. I found the way that I was going to be able to take care of my family financially for the rest of my life. The banker literally told me, “If you bring me another deal like this, use the line of credit for your down payment going forward. We’ll finance the deal, 85% plus the renovation. Line of credit’s your down payment. And then when you sell that property, you pay back off the line of credit. Or if you keep it as a rental, then you’ll refinance it on a 30-year fixed and you’ll pull out the money that you use for your down payment and go pay off the line of credit.” So he was explaining the BER method to me before there was a fancy term for it and that’s how I learned to get started.
And so at that point I knew I’ve got money now.
I’ve got money to buy deals. I just have to go figure out how to find more of these deals. And so that’s why I became this deal find. Everybody knows me as a guy who finds deals. Well, that’s why, because I had this banker who was giving me money to buy deals and I just had to learn how to find more of them if I wanted to grow. So I was able to solve those two problems early on. And that’s how I started to grow and scale my portfolio by leveraging that very first deal and by doing either the BERR method or flipping and paying off those properties.

Dave:
Amazing story. It’s such a great example of how just perseverance and a little bit of hustle can get you into this industry. Well,

Henry:
We’re going to take a quick break, but when we come back, we have more from your new co-host, Henry Washington, where he’ll be sharing some of his investor story with you. We’ll be right back.

Dave:
You’re on the show once, you’re talking about yourself in the third person already.

Henry:
Oh, that’s not what you do? Yeah, I thought that was what you do.

Dave:
Yeah.

Henry:
Yeah.

Dave:
Okay.

Henry:
I’m the end of

Dave:
Washington already. Welcome back to the BiggerPockets Podcast. I am here with my co-host, Henry Washington. All right, so super cool story. You’ve obviously established yourself as these deal junkie and great deal finders from the beginning, but where are you now? Fast forward to today, what does your portfolio and your business look like in 2026?

Henry:
Yeah, I’ve got somewhere around a hundred rental properties and I still flip anywhere between 10 and 20 houses a year, depending on the year. I think we’re doing 12 this year. We did 19 the year before that. So I flipped 10 to 20 houses a year. In terms of my portfolio size, I’m not aggressively growing my portfolio anymore. I’m pretty comfortable with the size of my portfolio. What I’m more focused on now is prioritizing the assets that I have into the ones that I know I want to keep forever and ever. Amen. And then the ones that would be nice to keep forever and ever, and then the ones that I sure would like to sell to somebody. But the goal is through selling those assets to pay off the ones that I know I want to keep forever. I’m in a mode where I’m more focused on stabilizing my assets and paying them off, protecting them.

Dave:
Because

Henry:
If you own real estate that’s leveraged, it’s not fully protected yet. You don’t truly own it. A bank can take it from you. And I really want to get a certain percentage of my portfolio paid off so that that’s that true family generational wealth. Those assets are ours. They’re in my family and no one can take them from us unless we decide to sell them.

Dave:
So obviously it’s an incredible success story going from where you were to where you are owning hundreds of units, being in this harvester stage. But what are some of the things that you’ve learned or maybe the principles that you’ve employed in real estate that have gotten you through that scaling phase and that you want to share with the audience as you’re more and more involved in the show?

Henry:
First and foremost, the thing that I’ve learned and that is the most important to me is that this is a people first business. For me, it’s people over profits. I think that we as investors are in a unique position to be able to help people who might need some of the help. And sometimes we have to be willing to do that even if it costs us money or time.

Dave:
Yeah, I think that’s true in the short run. I guess the way I think about it is how do you create mutual benefit? You’re not a charity, you’re a for- profit business, you’re not going out there to just help people stay in their home, but it’s like how do you create a situation where everyone wins? And I think that’s the most important thing about real estate. In any transaction, how do you create a situation where you as the investor can win, tenants win, the real estate agent you work with wins, the lender wins, the property manager wins. It’s the thing that you learn being part of these communities is that it’s not a zero-sum game where one person wins and then the other people have to lose for real estate investing to be successful. Everyone can benefit from these situations. I think that’s such an important thing.
And it might sound like you’re giving up profit, but I promise you in the long run, you will have a better, more sustainable business if you think about it that way.

Henry:
There’s enough deals and enough houses and enough opportunities to make money. If you take care of the sellers you’re encountering, if you take care of your tenants, we don’t have a business without tenants. They’re customers. And I feel like they don’t get treated like that by a lot of landlords. I feel like it’s this weird customer service business where the customers don’t actually get treated like they should be.

Dave:
Right. Yeah. It’s your job to provide them with a good product.

Henry:
And so if you can be a landlord who treats your tenants with respect, then they reciprocate and treat your properties and investments with respect. The second principle that I operate by is this is a business where you make money by controlling a deal. It doesn’t matter how you want to invest in this business, you need to be able to buy an asset at a discount. And so my principle is I want to walk into equity on day one. I may not always walk into cashflow on day one, and we can argue in comments about whether that’s right wrong or indifferent, but I’m always going to walk into equity on day one. I like that. I’ve got to be buying a deal at a discount or else it doesn’t make any sense. I’m not doing it. And the third principle is we’ve got to leverage our superpower.
Everybody has a strategic advantage of some kind, and it’s our responsibility to know what it is. A lot of the times it’s going to be your understanding of whatever particular market you’re investing in. Yeah, totally. And I think a lot of people sometimes throw that superpower out of the window because they want to Go invest somewhere else where they think it might be easier, but they’re not factoring in.

Dave:
It’s hard to learn in other

Henry:
Markets. Yeah, what your superpower is in your market.

Dave:
I was talking about that at BPON actually, because I was saying to people, even newbies, you have something to offer to the community and a lot of first timers like, “Oh, what can I help with? ” It’s like, you know your neighborhood, you know your area.That is something that you’ve rented in this neighborhood. You understand what it’s like to be a tenant in that neighborhood. That’s knowledge that helps you as an investor.

Henry:
Yep. You might know about projects that are coming down the road in certain neighborhoods. There’s a strategic advantage that we all have and you need to be able to leverage it. And don’t just throw your strategic advantage out of the window because you think things will be easier in some other market or some other niche. It’s just learn what your strength is and leverage it. Real estate is a game. What’s

Dave:
Yours? What’s your superpower?

Henry:
My superpower is, A, for some reason, people just want to tell me things. And so I’m really good at building rapport with people. Yeah, you are. And that helps me build trust with people. And this is a trust-based business. And so I’m able to get great deals and people choose to work with me over people who might be willing to pay them more just because they trust me. And so yeah, I think I have great people skills and that helps me in all areas of my business.

Dave:
What’s your non-real estate superpower?

Henry:
Non-real estate superpower. I got in the gym range in basketball.

Dave:
Oh, really?

Henry:
Well, if I walk in the gym, I’m in range.

Dave:
Oh, we got to see that. I won’t play you because I am awful of basketball. But I want to see that.

Henry:
I thought

Dave:
You were going to say as though you don’t get hangovers.

Henry:
No. No, I don’t get hangovers. That’s true. You get super powerful. Give me a basketball and I’m in the gym. The slights out.

Dave:
Okay. All right. We’ll put that to the test. Well, love those principles. They’re great. And I think we’re going to hear a lot more about them and more with you now as a co-host. So thank you so much for joining the show and for sharing your story. I guess I could stop thanking you. Now it’s your job. But I do appreciate you coming on and being vulnerable and sharing the story because I think this is the reality. People see it with people like you and I who have social media accounts, who host podcasts and see where you’ve gotten to, but we all start from the same

Henry:
Place. We all start from the same place. It’s

Dave:
Like everyone starts not knowing what to do, not having any clue if this is going to work out with not a lot of resources. And you’re a perfect example. It’s a super motivating and I think inspiring story showing that you can go from very little to being super successful and still being a great person and having a good business at the same time.

Henry:
Thank you very much. I’m more than thrilled to be here. I’m super excited to see where we take this show and I’m super, super blessed to be able to be here and share with all of you. And so thank you everybody for all the support that you’ve showed me and the comments over the past three or four years, and I just can’t wait to bring you more.

Dave:
All right. Well, thank you all so much for listening to this episode of the BiggerPockets Podcast. In the comments, we want to know what shows you want Henry and I to come out with here in 2026. We got a couple good shows playing for January and February, but we’re not that far planned out. So tell us what kind of shows, what guests you want, what topics you want to cover. Make sure to hit us in the comments. Thanks again. We’ll see you next time.

 

In This Article

Foreclosure markets move in stages. First come early filings. Then come the auctions. And when auction volume rises, it signals one thing clearly: Distress is maturing, and opportunities for investors may be expanding.

November’s foreclosure data tells an important story. While Foreclosure Starts cooled across much of the country, Notices of Sale surged 27.93% year over year, signaling that a large wave of properties is now entering the auction phase of the foreclosure pipeline.

For investors who buy at trustee sales, courthouse auctions, or pre-auction negotiations, the Notice of Sale stage is one of the most decisive points in the process. It compresses timelines, accelerates decision-making, and often reveals where future REO inventory will appear if properties fail to sell on courthouse steps.

This month, the numbers—especially county-level shifts—highlight where auctions are heating up, where they’re cooling, and what that means for investors entering the end of 2025.

National Auctions Push Higher While States Diverge

In November 2025, the U.S. recorded 17,402 Notices of Sale, up 2.38% month over month and 27.93% year over year.

This upward movement is meaningful. Even though October saw a temporary decline, November’s increase reinforces a broader trend: 2025 is ending with more auctions and more properties moving deeper into foreclosure compared to 2024. But the national averages mask big differences across states.

State-Level Auction Performance: Five Key Markets

1. Florida

• 800 Notices of Sale
• ?41.63% MoM
• Still +17.30% YoY

Florida recorded the steepest MoM decline of all major states. But the YoY increase keeps it above 2024 levels. Auctions slowed dramatically—likely due to October’s backlog.

2. California

• 1,130 Notices of Sale
• ?10.09% MoM
• +7.93% YoY

California’s auction activity cooled slightly compared to October, but remains higher than last year.

3. Ohio

• 490 Notices of Sale
• ?2.45% MoM
• +25% YoY

Ohio continues its steady upward march, consistent with its long-term trend of ongoing pipeline normalization.

4. North Carolina

• 534 Notices of Sale
• +35.39% MoM
• +92.09% YoY

 

This is the auction story of the month. North Carolina saw massive increases both monthly and annually.

5. Texas

• 2,612 Notices of Sale
• ?18.03% MoM
• +2.75% YoY

Texas dipped month over month, but remains one of the highest-volume foreclosure auction states in the country.

Why Notices of Sale Matter So Much

For investors, the Notice of Sale stage provides visibility into both timing and opportunity.

1. Auction timing becomes predictable

Once a Notice of Sale is issued, the property is typically scheduled for auction within three to six weeks, depending on state law. This creates a clear runway for:

• Due diligence.
• Funding decisions.
• Bidding strategy.
• Partner alignment.
• IRA or Solo 401(k) preparation for non-recourse financing.

2. Properties become more actionable

Unlike early-stage filings, which may cure or be resolved through modification, auction-stage properties are far more likely to change hands—either at the sale or shortly after as an REO.

3. Investors get first access to distressed assets

Buying at auction often means:

• Lower acquisition prices.
• Less competition than retail listings.
• More margin for BRRRR, flip, or long-term rental strategies.

4. Auctions signal future REO supply

When auction numbers spike, REO inventory typically grows 60 to 120 days later. Tracking NOS activity helps investors anticipate supply before it hits the MLS.

County-Level Insights: Where Auctions Are Heating Up or Cooling Down

Under Option C, we focus only on the most meaningful and statistically significant county-level moves—the ones that help investors understand where the action is happening.

Florida: Big auction pullbacks in the counties that matter

The statewide decline was driven by:

• Miami-Dade County: One of the steepest MoM drops in auction volume
• Broward County: Notable decline tied to October’s spike
• Lee County (Fort Myers): Also posted a sharp auction slowdown

But in contrast:

• Orange County (Orlando) saw a moderate increase in Notice of Sale filings, suggesting localized pressure.

Investor insight

Florida’s auction volume cooled dramatically, but key Central Florida ZIP codes still show rising pre-auction activity.

California: Slower auctions, but Inland Empire holds firm

Notable county-level shifts include:

• Los Angeles County: Meaningful MoM slowdown in auction postings
• Riverside County: Remained elevated despite the state’s decline
• San Bernardino County: Stable-to-rising NOS activity in several investor-heavy neighborhoods

Investor insight

California’s cooling is uneven; some Inland Empire markets are still quietly accelerating toward auction.

Ohio: Columbus leads the way

The most important county-level movement was in:

• Franklin County (Columbus): One of the strongest MoM increases in Notices of Sale
• Cuyahoga County (Cleveland): Posted a surprising slowdown despite historically high volume
• Hamilton County (Cincinnati): Stable, not signaling distress acceleration

Investor insight

Columbus continues to emerge as Ohio’s top pre-auction opportunity zone in Q4.

North Carolina: Massive auction injection

The state’s 35.39% MoM surge came primarily from:

• Mecklenburg County (Charlotte): One of the largest increases statewide
• Wake County (Raleigh): Rapid growth in trustee-sale scheduling
• Guilford County (Greensboro): Strong contribution to the YoY surge

Investor insight

North Carolina is moving through foreclosures faster than any other major state this month. This is a prime state for auction-focused investors.

Texas: Drop in volume, but one jaw-dropping spike

Despite a statewide decline, Texas still delivered one of the most dramatic county-level movements of the month:

• Harris County (Houston): Strong MoM drop in Notices of Sale
• Dallas & Tarrant Counties (DFW): Noticeable declines
• BUT: Bexar County (San Antonio): Posted one of the few MoM increases

Investor insight

Texas remains the fastest foreclosure pipeline in the country. Even during slow months, cases move quickly toward sale.

How Investors Can Use Notice of Sale Data

Auction-stage data is one of the most actionable foreclosure metrics. Here’s how investors can use it:

1. Build a county-level auction watch list

Identify counties where NOS filings accelerated this month:

• Charlotte
• Raleigh
• Columbus
• California Inland Empire ZIP codes
• Parts of Central Florida

These counties offer greater odds of finding auction inventory in the next 30 to 120 days.

2. Evaluate non-recourse loan timing (for IRA/401(k) investors)

Because auction dates are fixed, investors using self-directed retirement accounts can:

• Prequalify for non-recourse financing
• Prepare capital within tax-advantaged plans
• Structure cash offers in advance

3. Predict REO supply before it appears

Auctions that fail to produce a winning bid often become bank-owned. Rising Notices of Sale = rising future REOs.

4. Accelerate local market due diligence

Auction-rich markets require:

• Contractor availability.
• Property manager relationships.
• Title research efficiency.
• Local legal familiarity.

Tracking NOS data helps investors front-load their preparation.

Take Control of Your Investment Strategy

Auctions represent one of the most dynamic moments in the foreclosure process. They compress timelines, sharpen investor strategy, and reveal where motivated sellers—and lenders—are active.

If you want to deepen your understanding of foreclosure opportunities and explore how to use a Self-Directed IRA or Solo 401(k) to invest in real estate, learn more at: www.TrustETC.com/RealEstate

Equity Trust Company is a directed custodian and does not provide tax, legal, or investment advice. Any information communicated by Equity Trust is for educational purposes only, and should not be construed as tax, legal, or investment advice. Whenever making an investment decision, please consult with your tax attorney or financial professional.

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Dave:
2026 is finally here. I hope you all had great holiday and New Year’s. With the New Year upon us, this is a great time to start looking forward into 2026, talk about our goals and our New Year’s resolutions. I’m Dave Meyer, joined by Kathy Fettke and Henry Washington today. And we’re going to be laying out what we want to be more disciplined about this year, the strategies we think are going to pay off best for us, and the goals we want to have checked off by 2027. From how we buy and manage deals to how we think about risk and opportunity, we’re putting our plans on the record. This is On The Market. Let’s jump in. Kathy, Henry, how are you? Happy New Year. Happy New Year to you.

Henry:
Happy New Year.

Dave:
I am not going to lie and pretend that we’re recording this in the new year. It’s not really the New Year, but proactively to everyone. We’re recording this in December, but happy New Year to all of you. Kathy, you have some great holiday plans. Tell everyone what you’re up to. You’re always somewhere fun.

Kathy:
Well, yes, I’m in Paris recording this from a cave.

Dave:
You literally look like you’re in a medieval wide seller right

Kathy:
Now. I’m pretty sure I am. I’m in the oldest part of Paris, but I am here for the Christmas markets and mainly because my daughter is getting married in France. So I had to come see the venue with her. Had to. And then it’s also-

Dave:
Wow, you had to.

Kathy:
I had to, and it’s the last year of the Northern Lights being really intense. So we’re going to take a little trip up to the North Pole, to the North of Norway.

Dave:
Oh, that’s so great. Wow. What a fun trip. Henry, what were you up to in the holidays?

Henry:
Food.

Dave:
Enough set,

Henry:
Really. Absolutely. I mean, I have little kids, so I do get to enjoy the joy of Christmas still, so that’s fun, but mostly I’m eating my way through the holidays.

Dave:
Yeah, good for you. All right. Well, let’s jump into today’s episode because I really want to just start looking forward. Last year was a interesting … I wouldn’t call it a great year. I was going to say it’s a great year. I would not have called 2025 a great year. That would’ve been a straight up lie. I am feeling optimistic going into 2026 and just about real estate in general. So let’s talk about this in terms of what our New Year’s resolutions are. We’ll start with real estate, but if you want to throw a non-real estate one in, I would love to hear them. But Kathy, what’s your real estate New Year’s resolution?

Kathy:
Well, I have a few, but one is to really dive into AI because Rich actually bought a really expensive program and he’s finished it and I have not. I’m not even close. But I know it’s so powerful. I mean, one of the things that Rich did is he uploaded everything, our bank statements, the cash flow. Our system knows everything about us. And when we upload it, we could know which properties are performing well, which are not. I mean, we should be knowing that anyway, but I feel like sometimes it’s easy to get lazy or you’ve just owned properties for a while and haven’t really taken a look. Is this still a good performer? So using AI to optimize our portfolio is my goal for real estate.

Dave:
I like that a lot. I like this as a goal. It’s not like, oh, I have to buy this property by this data. This is more like a growth mindset kind of goal. How do you just evolve as an investor generally so that you can make better decisions going forward? Is that program, is that real estate specific?

Kathy:
No, no. It was just a bunch of business owners. But I mean, it’s like he’s got a business consultant now. All of our business financials are in there and we had every employee detail what they do, not in a dog kind of way, but I guess kind of like what do you do all day? And so AI knows each employee and knows how to optimize for them. It’s really been phenomenal. Wow. And we had one of the best months ever for our company last month. I don’t know if it has to do with that or not, but that’s strange, right? At a time when real estate has been so slow, sales have been slow, we had a really good

Dave:
Month. That’s awesome. So it sounds like you’re using AI not just to identify properties or deals, but work on and in your business as well.

Kathy:
Yeah. I mean, how many times do you really know what your insurance covers?

Dave:
Literally never.

Kathy:
So with, I’ll say Claude, for example, we can upload our entire insurance thing. There’s a word for it.

Henry:
Your insurance binder? Yeah.

Kathy:
Yeah, that thing, the binder. To just really know the details of your insurance policy and even ask it, “Hey, is this covering me for everything I need for this investment property in this particular state?” It’s really phenomenal with what’s available to us and it’s only going to get better, so why not be on the cutting edge of it?

Dave:
I love it. Henry, are you using AI regularly?

Henry:
The short answer is yes, but I’d be lying to you if I told you I was using it on a much deeper level than just the surface level asking for help with certain items. Now, I did try to build something similar to what Kathy was talking about about two months ago where I was uploading transaction data and information from my property manager because I wanted to see if AI could give me a sense of how well certain properties are performing. And I thought if I could upload the actual bank statements and marry that against the data from your property manager who’s actually going out to the properties, doing the actual repairs. And then I wanted to marry that against what I’m spending with contractors on certain properties to get just a bird’s eye view of my portfolio. And it was very challenging in ChatGPT. And so I’m wondering if I should try Claude or Gemini or one of those.

Kathy:
Claude is so good for business.

Dave:
Oh, really? I got to check that out because Henry and I were just in Seattle and people were raving about Gemini.

Kathy:
Yeah.

Dave:
I feel like it’s a horse race right now. One releases a new one and it gets a little bit better and then the other one gets a little bit better, but there’s not a clear winner. I just have to tell you guys, I got a little bit of a behind the scenes look at a big real estate company’s new AI tool. It’s not BiggerPockets, but there’s another one that’s going to release one soon. I got to do the beta. It is so freaking cool. It’s unbelievable how good the analysis and information about properties and markets. For a data analyst, this thing is so cool. I am super excited to start using these kinds of tools in my own analysis. But I have to ask you guys, maybe I’m just a complete control freak, but I use this for research, but I double check everything

Kathy:
That

Dave:
I do still, right? Okay,

Kathy:
Good. Because it still makes lots of errors. It’s not there yet, but it will be. It will be. So learning the things that we’re learning. And bottom line, the goal for me for doing all this is I want to see if I can … Wait, let me say that in a more powerful way. I’m going to increase cashflow by 10% by optimizing our portfolio, whether that means taking some older properties that aren’t really performing and 1031 exchanging them into better ones or just looking at things like we bought a lot 10 years ago because we were living at a house where someone was going to build this mega box property that block our view. And so we bought the lot so they wouldn’t do it and now we don’t live there anymore and we just kind of haven’t done anything with it. We tried to sell it.
Nobody wanted just a lot. So that’s one thing. It’s like, how do I optimize this piece of land that’s just been sitting there and we’re paying taxes on? And so I’ve been working with a manufactured housing company and we’re going to put manufactured housing on that lot. And so when I’m doing a whole new thing and it’s actually going to cash flow in California

James:
California.

Kathy:
Yeah. And if my daughter ever decides she wants to move down the street from us, there’ll be a house there for her. Intent. But yeah, it’s kind of just stuff like that. Just kind of looking at what we have, the theme is more isn’t always better. Look at what you have and make it better.

Dave:
That’s great. Well, I think this is an awesome New Year’s resolution. I really like this idea of getting better at AI because I will admit, I am simultaneously excited by AI and very, very scared of it and terribly side of it. And so sometimes I just choose to ignore it because I’ll see these deep fake videos online and I’m like, “AI is evil.” But then you talk about all these things that AI is amazing for. I just need to figure out the right way to use it for my business that makes sense and not be overwhelmed by the societal implications that might be coming with AI at the same time.

Kathy:
For sure. I mean, an example is just I’ve been working a lot with Claude, that’s what I use. And asking for LA County, what do I need to know about manufactured housing? Tell me this step-by-step process. And it’s not 100%, it’s not easy, but it helps it feel not as daunting.

Dave:
All right. Well, I love this. This is a great New Year’s resolution. Thanks for bringing this one, Kathy. We got to take a quick break, but we’ll be back with Henry’s New Year’s resolution right after this. Welcome back to On the Market. I’m here with Kathy and Henry sharing our goals, New Year’s resolutions for 2026. We heard Kathy’s, which I love about getting better at using AI. Henry, what is your New Year’s resolution even though you don’t like them?

Henry:
No, I don’t like them. And I always feel awkward when people ask questions like this because of the kind of investor I am. I just do old, boring real estate, Dave. I buy distressed properties, I fix them up and then I rent them out or I sell them. And I think when people ask about resolutions, they expect to hear some super ambitious, creative thing that you’re doing. Like a big pivot,

Dave:
Like you’re making some change. Yeah.

Henry:
Yeah. And my goals are very similar each year because I just want to continue to do what works and what’s worked for generations, which is another iteration of the same thing. But now that I’ve placed that caveat, essentially I think of investing in three buckets where you’re either growing, you’re stabilizing or you’re protecting.
And we as investors operate in typically two of those buckets at a time, heavily weighted more so on one than the other. And so as I started in 2017, I’ve been a lot more focused on growth. So my goals each year were always around how many more assets do I need to acquire? How many more projects do I need to flip to give me the funding to acquire those assets? But now I’m in a place where I’m more focused on stabilization and protection. And to me, protection is paying off. And so my goals for 2026 or my resolution, if you want to call it that, is more focused around stabilization, optimization similar to Kathy and paying off debt. So I have a stretch goal of paying off two properties in 2026. And I know two doesn’t sound like a lot, but we’re talking about completely clearing the debt on two assets, which I think is a big deal.
So I want to pay off two of my assets and there’s about four assets that I need to stabilize because I’m bleeding money in them right now.
Some of them my own fault, some of them, no fault of my own. One in particular, I bought a duplex, not in a flood zone, and we had a crazy flash flood and it tore through both units of the duplex. And then on top of that, a big mistake happened with one of the remediation companies where they did some work unauthorized to the tune of $40,000. So I have about a $40,000 bill that we’re fighting because they weren’t supposed to do the work and I have about a $50,000 renovation I’m going to have to fund out of pocket. So these are big ticket items. They don’t just come very easy. So that property right now is a duplex that I pay monthly all the expenses on, but has no income. So stabilization is a big deal for me in 2026. I also have some multifamily assets I bought in 2023.
Again, no fault of my own. The city has come in and is requiring me to do some work that we didn’t plan on doing that where you can’t really fight. So there’s a lot that happens in a real estate portfolio that I just, I think requires you to take a step back and evaluate. So 2026, stabilizing the assets that are bleeding money and paying off two properties. And so those lead me to my other goals, which is I need money to do those things. So that guides me to how many projects I need to take on throughout the year to generate the income I need to solve those problems, live my life. Make sense?

Dave:
It does make sense. I love the way of thinking backwards. A lot of people would be like, how many flips can I do, maximize, and then take that money and be like, what am I going to do with it? But I really like thinking about it like, what do I need to do? And then sort of backing into the minimum amount of work that you can do. That doesn’t mean you might not take on more deals if you find opportunity, but just having a good sense like, okay, I need to do two a quarter or one a year. I need to do that, make sure I’m hustling on that, and then I’ll take everything else that comes from there.

Henry:
Yep. I average probably around like $45,000 net profit on a flip, and I would estimate that I need to do about 15 projects to be able to pay off the properties that I’m looking to pay off and to be able to have the income necessary to continue to live and be able to stabilize the four assets I need to stabilize. So that’s my goals.

Dave:
I love it. I guess I understand maybe why you don’t love a New Year’s resolution because this sounds like it’s a multi-year project too. It’s not like this is something you do in 2026. This is a piece of a larger goal that you have been working for and will probably need to keep working towards beyond 2026.

Henry:
Yeah. My larger goal, ideally, now they say your goals are supposed to be big and scary, right? In corporate world, they call them stretch goals. The big scary stretch goal is to have a third of my portfolio paid off 10 years from now.

Dave:
I like that.

Henry:
That’s a lot.
It’s a lot of money. But I feel like if you don’t set a big scale … Shoot for the moon land on the stars. If I end up with half of that paid off, that’s still going to put me in an extremely strong financial position in 10 years. So the larger goal is that. And then what I do each year is tying into that. And then I have to adjust each year because yeah, I have a goal of two this year, but what if I only get one? So then I need to take what happens in 2026 in terms of the economic outlook and make new goals. Maybe 10 might be too far out. Maybe I need to change it. So I think I’m not afraid to reevaluate my goals based on what’s happening, but I try to make it all tie together.

Kathy:
I love that. It sounds like you’re also looking at the protection side of it because as you start paying off properties, oh, there’s such relief knowing that if there’s anything goes wrong and you just can’t predict, you can’t predict things like 2020 coming along that turned out not to be bad for real estate at all. Ended up being a pretty good time for real estate, but could have gone the other direction. And when you’ve got paid off properties, boy, all you have to do is sell a couple and it’ll help pay for the other ones that you’ve maybe over-leveraged. And I know that you have way over-leveraged to get to where you are now and that has worked, but at some point you’re like, okay, it’s time to turn the ship and pay some of this off. That’s great.

Dave:
It’s interesting to hear both of you are focusing on optimization instead of growth. Is that a reflection of the market or just where you are in your personal investing journey?

Kathy:
That’s a good question. It was just the first thing that came to mind because it’s what I’ve been doing and excited about. Just taking a look at some of these properties that I bought 10 or 15 years ago and really haven’t paid any attention to them. For example, one, it just vacated and I talked to the property manager and she goes, “If you update this by about $20,000, you’ll get about 100,000 extra in equity.” I hadn’t even thought

James:
About

Kathy:
It. Easy. So that’s exciting. And if I do that, then we can sell that or keep it, take the money out. And so it’s almost like an after the fact bur,

James:
10

Kathy:
Years later down the road, bur.

Dave:
A slow bur. It just doesn’t matter. Just keep optimizing things over the long run. This is the way to do it. It’s absolutely right. I love that.

Henry:
For me, Dave, it is more a function of where I am as an investor because I’m a deal junkie and I love the process of finding deals. I love buying a great deal and I love operating assets in great parts of the community. It all is so fun for me, but at some point I have to get to a place where I am protecting the assets I have so that I have paid off assets to pass on to my children. The overarching goal for my real estate business is for my children to be able to be the people they’re called to be and not the people they have to be for money. So if they need or want to do something that isn’t going to pay them a ton of money, at least I have these assets that will be paid off that can provide income for them.
And so to get there, I have to pay off properties. And so I have to draw a line in the sand somewhere and start paying down these assets. And so that’s why I have the 10-year goal trying to get some of these paid off so that I have those to pass. Now, when I get to that point, Dave, I may just start doing more deals again, but I will always have- You will. You will. You’re right. And I’ll probably still do deals that are home run deals along the way. I’m not saying I’ll never buy another rental property between now and 10 years from now. I’m just saying I’m not in aggressive growth mode. So optimization is more important to me right now than growth was. And growth was more important to me when I first got started. It’s just a shift in where I am as an investor.

Dave:
All right. Well, these are great resolutions. Thank you. I really think these are, obviously they’re not just resolutions, but just goals and good perspective on where you both are in your investing journey. We are going to take a quick break, but we’ll come back with my New Year’s resolution right after this. The Cashflow Roadshow is back. Me, Henry, and other BiggerPockets personalities are coming to the Texas area from January 13th to 16th. We’re going to be in Dallas, we’re going to be in Austin, we’re going to Houston, and we have a whole slate of events. We’re definitely going to have meetups. We’re doing our first ever live podcast recording of the BiggerPockets Podcast, and we’re also doing our first ever one-day workshop where Henry and I and other experts are going to be giving you hands-on advice on your personalized strategy. So if you want to join us, which I hope you will, go to biggerpockets.com/texas.
You can get all the information and tickets there.
Welcome back to On the Market. I am here with Henry and Kathy talking about our New Year’s resolution. Kathy shared that she’s looking to optimize her portfolio and learn more about AI. Henry is going to be trying to pay down some of his debt and stabilize some of his assets. My New Year’s resolution for 2026, and I’m with you on this, Henry. This is something I’ve been thinking about for at least six months and is going to take me 10 years. But my plan right now and the thing that I’m focusing on is enacting what I’m calling my end game.
Hopefully not going anywhere, but I’ve been investing for 15 years now and I feel like I’ve had these two different eras of my own investing. My first 10 years, I bought rental properties, I self-managed them, all of them locally in Denver. Those were the first 10 years. The last five years, then I moved abroad. I was living in Europe. I sold some rentals. I got pretty into passive investing. I got into lending. I do syndications. I still own rental properties, but I’ve kind of had this second era. And now I want to move. I’m back in the United States. I want to move into my third act as a real estate investor. And I call it my end game because I want to spend the next 10 to 15 years putting myself into retirement. I am in a fortunate position where I do feel like I have enough capital to do it, but I need to rearrange my portfolio into an optimized way so that 10, 15 years from now, I’m going to have a portfolio that is just rock solid.
It’s only assets that I really like. Ideally, they’re paid off or have very low debt on my overall portfolio. And I actually think it’s a good time to start acquiring rental properties right now. And so I’m seeing opportunities trade out of some of my more passive options or lending and start acquiring the assets that I want to own ideally for the rest of my life.That’s kind of what I’m starting to think about. And I’m even considering … Henry and I were just together in Seattle. We were talking about this, thinking about putting things on 15-year notes, for example, instead of going to the 30-year fix that I’ve always really used and just start thinking, I’m 38 years old. At 53, I probably still won’t retire, but I want the portfolio that I can retire off of and that I wouldn’t need to touch if I didn’t want to for the rest of my life to be in place.
That’s not going to happen in 2026. This is going to take me probably at least five years to reposition things, do some different projects, learn a little bit, but that’s my goal. That’s the thing I’m really working on.

James:
Love it.

Henry:
Yeah, no, I think that that’s just smart financial planning. It’s similar to what I’m thinking about because I enjoy what I do now. I like chasing deals. I like flipping houses. It’s still fun and exciting. And is there annoying parts of it? Sure, but I enjoy it. But will I still enjoy it in 10 years? Will I just be tired of the chase? I’ve talked to a lot of seasoned investors in their 50s, 60s, and 70s, and the one theme across all of them is at some point they got tired of chasing deals. They got tired of churning houses and flipping houses. And so if I can get myself to a point where I don’t ever have to flip another house if I don’t want to, but I can still choose to, that’s ideal. And it sounds like that’s what you’re trying to get to.
How do I get to the point where if I just want to sit down and do nothing, I can. I’m taken care of, my family’s taken care of, my legacy’s taken care of. But if I want to go do some cockamamie crazy deal, I can also go do that. Definitely.
Getting yourself to retirement doesn’t mean you have to retire.

Dave:
First of all, I got tired of flipping houses before I even got started. So good for you. I did one, that’s all I needed. I’m at two right now and I’m tired. And I didn’t even do the GC. You

Henry:
Didn’t do the hard part.

Dave:
I didn’t even do the hard part. I’m tired of it. No, I signed last night though and getting this thing done. So that’s great. No, that’s exactly right. For me, it’s not even the flipping. I’m always tinkering. I’m just like an optimizer. I’m always moving money from here to there. And I got to stop doing that too. I will do some of it. I will keep some of my money for fun because for me, that’s fun. Like you were talking about, Henry, you like looking at deals. For me, I like investing in passive deals. I like underwriting deals and figuring them out and looking for different opportunities, but I need to put the rock solid thing back in place because I had a lot of great rentals. I don’t regret selling any of them, but I have not rebuilt my active portfolio in the way I want to yet.
And so that’s really what I’m going to be focusing on. And like I said, there’s better and better deals. It’s not even that prices have gone down that much. It’s just the asset quality is so much better, in my opinion. And you’re seeing high quality properties come on the market. I think multifamily is looking more and more attractive right now. And so that’s the plan for 2026. My other resolution, just so you know, as always, is to go on as many vacations as humanly possible.
How do I travel all the time?

Henry:
Can we go on record, Dave, and set a stretch resolution? You and I? Uh-oh. Can we set a resolution that within five years we land an Anthony Bourdain style TV show where we travel around, eat food and talk about real estate?

Dave:
This is our dream in life. Yes. We need a new vision board, you and I. Yes. All right. Well, this was a lot of fun. Thank you guys. I would love to hear your New Year’s resolutions, right? We want to hear them. Share them with us in the comments. We want to hear what your New Year’s resolutions are real estate-wise, fun-wise, lifestyle-wise, because at the end of the day in real estate, we’re doing this usually not because we just want to own or acquire assets for something, because it frees up something else in our lives, spending more times with our friends, family, traveling, eating disgusting amounts of food. This is why we’re actually here. So tell us what your resolutions are. Kathy, happy new year. Thanks for being here.

Kathy:
Thank you. You too.

Dave:
Henry, happy new year. Excited for another year doing on the market with you both. And James, of course, when he decides to grace us with his present. Yes.

Kathy:
Absolutely. Thank

Dave:
You. Thanks everyone. We’ll see you next time.

In This Article

This article is presented by NREIG.

Winter has a way of exposing every weakness in a rental property. 

The first deep freeze can turn a hairline pipe crack into a flooded basement. One unshoveled walkway can become a slip and fall dispute. A furnace that worked “just fine” in October can suddenly fail the moment temperatures drop into the teens. And when these issues hit, you’re looking at liability exposure, frustrated tenants, and preventable property damage. 

That’s why smart landlords treat winter like the high-stakes season it is. The risks are predictable. The solutions are straightforward. But clarity is everything. When you assign winter responsibilities clearly, before the first snowflake, you drastically reduce emergencies, misunderstandings, and costly claims.

Winter is one of the top seasons for insurance claims. Partners like National Real Estate Insurance Group (NREIG) help landlords stay protected when the unexpected happens, even when you’ve done everything right.

Let’s break down the biggest cold-weather threats to your property, why these risks spiral when lease language is unclear, and how to structure winter responsibilities so you and your tenants stay aligned from day one. 

Winter may be unavoidable, but winter damage doesn’t have to be. Let’s get ahead of it.

The Biggest Winter Risks Landlords Face

Winter exposes weaknesses in a rental property faster than any other season. Even well-maintained homes can experience failures when temperatures swing, snow loads increase, and moisture builds in hidden places. Understanding these risks in detail is the first step to preventing midwinter emergencies, insurance claims, and tenant disputes.

Frozen and burst pipes

When temperatures plummet, water inside pipes can freeze and expand, causing cracks or catastrophic ruptures. A single burst pipe can release hundreds of gallons of water in minutes, damaging drywall, flooring, electrical systems, and tenant belongings. 

These events often trace back to simple oversights like a tenant turning the thermostat too low, a drafty crawlspace left uninsulated, or an outdoor spigot not winterized properly.

Frozen pipes also tend to trigger disputes about responsibility. Tenants may blame the property, while landlords suspect improper thermostat settings or failure to drip faucets. Without clear winter expectations in the lease, determining fault becomes messy, fast.

Ice dams and roof damage

Ice dams form when heat from the home melts roof snow unevenly. The meltwater refreezes at the edges, trapping water behind it. That water can then seep under shingles, causing leaks, ceiling stains, mold, and insulation damage. Landlords often don’t realize there’s a problem until tenants report water spots, and by then, repairs can be extensive.

Roofs also bear extra weight in winter. Heavy snow accumulation can strain older structures, loosen shingles, damage gutters, and set the stage for leaks during the thaw.

Slick walkways, stairs, and driveways

Slip-and-fall incidents spike during winter. Even a thin layer of ice can send someone to the ER. Landlords risk liability if walkways, stairs, and driveways aren’t addressed promptly, and tenants may assume the owner is responsible unless the lease explicitly states otherwise.

Regular clearing of snow and ice is critical, but problems arise when expectations aren’t communicated clearly, or when a tenant believes “minor ice” isn’t worth reporting.

Heating system failures

A broken furnace in winter is both inconvenient and a habitability issue that can force tenants into hotels, damage your property, and trigger rent credits or claims. Heating systems work harder in extreme cold, so worn parts, dirty filters, or overdue maintenance can lead to sudden failure.

Inconsistent heating also increases pipe-freeze risk and pushes tenants toward unsafe temporary solutions like ovens or portable heaters.

Space heater fire risks

Space heaters cause thousands of residential fires each year, many of them in rentals. Tenants often place them too close to bedding or curtains, plug them into overloaded power strips, or leave them running unattended. Without clear rules and education, landlords may face fire, smoke, and liability fallout.

Outdoor fixtures and drainage

Unwinterized hoses and spigots can freeze and burst. Clogged gutters and downspouts create ice dams. Poor drainage causes meltwater to pool near foundations, leading to seepage or basement leaks.

Each issue is predictable and preventable when both landlords and tenants know exactly what to do and when. That’s why the next section digs into why clarity in the lease is the most powerful winter-proofing tool you have.

Why Winter Responsibilities Must Be Crystal Clear in the Lease

Winter issues can cause property damage and create confusion when the lease isn’t specific about winterization responsibility. When a pipe freezes, a walkway ices over, or a furnace stops working, tenants and landlords often have completely different assumptions about who should have prevented the problem, and who must fix it now. And that confusion turns into dollars lost—fast.

At its core, unclear winter responsibilities open the door to three major risks: disputes, liability exposure, and preventable losses.

Clear responsibilities prevent costly losses

Winter property damage is expensive, but most common issues are preventable with the right actions: dripping faucets, clearing gutters, insulating exposed pipes, and reporting heating issues immediately. The problem is that tenants don’t automatically know they’re supposed to do these things.

When the lease clearly outlines winter expectations and those expectations are communicated early, problems are resolved quickly, before they turn into emergencies. A well-written lease protects both landlords and tenants, so keep winter specifics in mind when drafting your lease. 

What Winter Responsibilities Should Actually Look Like

Once you understand why winter duties must be clearly defined, the next step is translating those expectations into practical, actionable responsibilities. The goal is to eliminate any guesswork about who is responsible for what and when.

Tenant Responsibilities: Daily and Weekly Winter Tasks

Tenants play a key role in preventing winter damage, but they can only do so effectively when their responsibilities are spelled out in the lease.

Snow and ice removal

Tenants should be responsible for clearing snow and applying ice melt on walkways, steps, driveways, porches, and any areas they use regularly. This reduces slip-and-fall risk and keeps access points safe.

Thermostat minimums

A clear minimum temperature, often 55 to 60 degrees, prevents pipes from freezing. Tenants must understand that turning the heat off to “save money” can lead to thousands in damage.

Dripping faucets and cabinet access

During extreme cold, tenants may be required to drip faucets and open cabinet doors to allow warm air around pipes. These small steps can prevent major plumbing failures.

Prompt reporting of issues

Tenants should immediately report:

• No heat or inconsistent heating
• Slow drains or signs of pipe freezing
• Roof leaks or ceiling spots
• Ice buildup around gutters or walkways

A simple delay in reporting can magnify losses dramatically.

Safe use of space heaters

If space heaters are allowed, tenants should follow strict rules: Keep them away from flammable materials, avoid power strips, and never leave them unattended.

Landlord Responsibilities: Structural and Seasonal Preparation

Landlords must handle the tasks that protect the property’s infrastructure, especially the systems tenants cannot safely access or maintain. Fireplace maintenance?

System maintenance and inspections

Seasonal furnace inspections, filter changes, and identifying weak points in the HVAC system help prevent midwinter failures.

Insulating vulnerable areas

This includes crawlspaces, attics, basements, exterior walls, and any exposed piping.

Gutter and downspout clearing

Removing fall debris reduces the risk of ice dams and roof leaks during freeze-thaw cycles.

Winterizing outdoor fixtures

Disconnect hoses, shut off exterior spigots, cover exposed fixtures, and ensure proper drainage away from the foundation.

How to Document These Tasks Clearly

A strong lease spells out responsibilities in plain language. Create a winter addendum or dedicated section that includes:

• Exact temperature requirements
• Snow and ice removal details
• Clear timelines for reporting problems
• Specific safety expectations (space heaters, plumbing steps, etc.)

Communication is key

Even with a solid lease, reminders matter. Sending tenants a winter checklist or early-season email reinforces expectations and helps keep everyone aligned. With responsibilities clearly divided and documented, both landlord and tenant are equipped to keep winter from becoming a season of emergencies. 

How to Conduct Mid-Season Inspections

A mid-season inspection is your next best tool for catching winter-related issues before they escalate. By the time January or February arrives, your property has already endured weeks of freezing temperatures, fluctuating weather patterns, and increased system strain. A quick check-in can uncover small issues before they evolve into expensive emergencies.

Additionally, a quick check-in also reinforces accountability. When tenants see that you’re monitoring the property’s condition, they’re more likely to report issues promptly and follow winter responsibilities outlined in the lease.

What to look for during the inspection

A thorough mid-season walkthrough should include:

• Heating performance: Is the furnace cycling normally? Are there cold spots or signs it’s struggling? Insulation still in place?
• Frozen pipe indicators: Check under sinks, in basements, and in crawlspaces for condensation, frost, or slowed water flow.
• Roof and gutter areas: Look for ice buildup, icicles, blocked downspouts, or ceiling discoloration inside.
• Drainage concerns: This includes meltwater pooling near the foundation or improperly directed downspouts.
• Exterior walkways and stairs: Ongoing slick spots or areas that tenants aren’t maintaining.

How to communicate findings

After the inspection, send tenants a short, friendly summary, outlining:

• Any issues observed
• What you will be addressing
• What the tenant needs to handle
• A follow-up timeline

This keeps everyone aligned and shows tenants you’re actively protecting the property, and their comfort, from mid-season risks.

How to Protect Yourself This Winter

Even with clear winter responsibilities, diligent tenants, and proactive inspections, winter still has its surprises. Landlords who take winter seriously don’t just rely on good communication and strong lease language—they also make sure they have the right insurance partner in place. Because when something goes wrong in January, the cost of recovery can escalate fast.

This is where National Real Estate Insurance Group (NREIG) becomes such a critical part of your winter strategy. NREIG specializes in protecting real estate investors from exactly the kinds of risks winter brings. Their coverage is built around real-world property challenges like frozen pipe damage, roof leaks from ice dams, slip-and-fall liability, heating system failures, and even tenant-caused issues.

NREIG’s programs also include investor-focused protections like:

• Liability coverage tailored for rental properties
• Property coverage for sudden winter damage events
• Loss of rents support when units become temporarily uninhabitable
• The Tenant Protector Plan®, which adds another layer of protection when tenant negligence contributes to a covered winter loss

Having an insurance partner who understands these seasonal risks means you’re not navigating winter alone or left fighting through claims with a carrier unfamiliar with rental operations.

Winter may always bring uncertainty, but your financial exposure doesn’t have to. The strongest defense is a combination of clear winter responsibilities, proactive maintenance, and investor-focused insurance that steps in when the unexpected happens.

If you want to ensure your rental portfolio is protected against frozen pipes, slip-and-fall claims, fire-related damages, and other cold-weather surprises, now is the time to strengthen your coverage. Take the next step: Review your current policy and get a tailored, investor-focused quote from National Real Estate Insurance Group (NREIG). Their team understands the unique winter risks landlords face, and can help you close coverage gaps before the next storm hits.

Protect your investment with confidence. Start your quote HERE.