If you think the tech economy is slowing down, try to rent a home or apartment in San Francisco.
According to a new report from the real estate experts at Nested, the city now has the highest rents around. Not just in the United States – but in the entire world.
It’s no doubt largely due to the fact that the tech boom in SF and Silicon Valley is running at full speed, leaving the city with a vacancy rate below 3%.
Nested based its results not on average rents but on the price people pay per square foot. In San Francisco, renters pay $4.75, the highest among more than 100 cities around the world the agency studied.
While San Francisco lies in the epicenter of the tech sector, it’s not the only city with soaring rents.
Not surprisingly, Wall Street is getting in on the act. The number of financier-owned rental properties in the United States jumped 60% last year.
You can get in on this act, too.
You see, Wall Street needs data – a lot of data – to help them make their real estate investing decisions.
They’re paying top dollar for that data – and most of them are buying it from the tech company I want to tell you about today.
It’s doubled once for my longtime readers.
And it’s poised to double again – fast.
A Personal Connection
My wife and I pay a lot of attention to rental rates here in the Bay Area. After all, we have two daughters, ages 19 and 22, who are in college. When they’re done with school, they hope to return here to start their careers.
But the lack of affordable housing – even for recent college grads with advanced degrees – is getting out of hand. According to Nested, the salary needed to pay the average rent here is $86,000. That’s a pretty big paycheck for someone right out of college.
So we pay pretty close attention to the data that’s out there. We know we’ll need it in a few years.
SF isn’t alone here, with rents soaring in nearly every major U.S. city.
No wonder Wall Street is jumping in on the action.
According to recent article The Wall Street Journal says Pretium Partners LLC has raised more than $1 billion so its Progress Residential division could buy 26,000 homes. Plus, the Journal says, bond buyers, wealthy Chinese investors, and pension funds have raised enough money to buy more than $3 billion worth of rental homes over the next several years.
Clearly, all these investors also will need reliable data in order to make smart decisions. They need to be sure their properties have no tax or other liens, that they’re in safe areas, and that they have clear titles. Plus, they want accurate data on their renters.
Enter the company that operates what I believe are the deepest and best databases on a wide range of rental units and other real estate.
The Landlord’s Best Friend
I’m talking about CoreLogic Inc. (NYSE: CLGX).
See, the firm’s robust database and analytics cover everything real estate – not just rental properties.
From single-family homes and apartment buildings to oil and gas exploration and telecommunications lines, CoreLogic’s data is a top tool for any property owner.
CoreLogic does credit checks, as well as criminal records checks, with a particular focus on property damage incidents. That makes it popular with real estate investors, landlords, and banks.
As such, it’s uniquely positioned to capitalize on the nation’s surging real estate market, including rising rental demand that has resulted in housing inflation in many metropolitan areas.
We first talked about CoreLogic in August 2014, when it was trading for roughly $27.
It reached $55.79 on June 12, meaning those of you who acted on that recommendation have peak gains of 107%.
Since then, it has softened with the rest of the market. But in recent days, CoreLogic has resumed its uptrend — and there’s still upside ahead.
A lot of upside ahead…
50 Years of Tracking Data
Irvine, Calif.-based CoreLogic can trace its roots back 50 years through the TRW credit-reporting agency – and has seen a lot of changes during that period.
Eight years ago, First American Financial Corp. (NYSE: FAF) spun CoreLogic off as a standalone, publicly traded firm focused on providing data for real estate and increasingly financial services, including mortgages and consumer loans. (First American stuck with title insurance services.)
Indeed, CoreLogic now ranks as one of the nation’s largest Big Data plays on the real estate industry. Big Data is the technology of taking vast amounts of raw unstructured data and using computer tools to sift through it all and provide actionable analysis.
That’s exactly what CoreLogic does…
Consider that the company operates data bases that encompass more than 4.5 billion records in the United States, Australia, and New Zealand.
CoreLogic maintains records on just about anything to do with property, as well as credit information used for auto loans and home mortgages.
- More than 147 million property records representing approximately 99.8% of the U.S. population.
- Historical data on more than 795 million real estate transactions.
- Tax payment history on more than 128 million parcels.
- More than 99% of all U.S. county, municipal, and special tax jurisdictions records.
- Relationships with more than 650,000 real estate agents and brokers, as well as 17 of the top 20 multiple listing services and 2,500 mortgage bankers.
- And approximately 23 million active tenant/landlord records, representing approximately 70% of the rental market.
Make $1,795 (or More) From These “Rent Checks”
Trading at roughly $53 a share, CoreLogic has a $4 billion market cap. It also has an improving set of financials. Over the past three years, it has grown earnings per share an average 15%. But in the most recent quarter, they nearly tripled to 41%.
As a sign of good profit margins, earnings are growing roughly 36% faster than sales. That also tells us that CoreLogic is doing a great job of upselling clients to its growing roster of high-profit cloud offerings.
And that data point proves something we’ve long believed about this company – that a focus on cutting costs would produce much better profits for the firm and investors alike.
What we’ve got here is a great long-term Big Data way to play multiple aspects of the nation’s real estate sector.
Given its current earnings picture, I believe the stock will double again from here – in less than four years.
That’s fast money, but my colleague D.R. Barton, Jr. has been investigating an even faster way to make money in the real estate sector.
And he’s unveiling his findings today…
American taxpayers have been footing the bill for hundreds of federal facilities across the country. Whether you realize it or not, the money’s been coming out of your paychecks, Social Security checks, and the checks you sign over to the IRS every April.
But now, you can get them to pay you back. D.R. is here to tell you how everyday folks from across the country are taking advantage of an obscure IRS directive to collect “Federal Rent Checks.” And you, too, could collect your check as early as next month… and every month after that.
I told you this was fast.
It’ll come from the $11.1 billion that’s flooding into the Treasury Department this year alone. You see, those same federal agencies you’ve been helping fund for decades are also required to pay rent for the properties they sit on. And some very smart people have figured out how to tap into a huge portion of that massive money pool.
For example, the Social Security Administration will have to pay $21 million to rent its state-of-the-art facility in Baltimore. All of this will funnel into that $11.1 billion Federal Buildings Fund.
And it only takes 10 minutes to set up… D.R. starts to show you how in this presentation.
Just click here to get started.
Cheers and good investing,
Michael A. Robinson