Leland Char is a 28-year-old product manager for a large San Francisco-based tech company. He loves the Bay Area’s “very authentic Asian food and new American cuisine, smart well-educated people, the multiple job opportunities, the friends that I’ve made, and fantastic hiking.”
What Char hates is the house prices, and the fact that even with a dual income, he and his fiancée can scarcely afford to buy a home in their community, let alone have in-laws join them as they put down roots.
So he settled on a solution that’s unorthodox, but which suits him: he bought eight houses in Texas.
He’ll continue to rent his own home in San Francisco, and has leased out the far less expensive properties in Texas, expecting to reap a better return than he could from stocks or bonds, while also building up equity.
Char, who built extensive spreadsheet models with all kinds of scenarios to test assumptions, doesn’t see a contradiction in becoming a “first-time homeowner” of a property he may never set foot in. Like a good tech worker, he found a way to make his investments online, using a fintech startup called Rootstock.
Launched in late 2015, Roofstock is one of the leading platforms for the burgeoning market in single-family house rentals for long-distance investors. While there have been landlords for as long as there’s been property, this particular market moved in a different direction in the aftermath of the housing crisis, when large institutional investors like Blackstone began scooping up houses by the thousands at fire-sale prices in order to rent them out.