September Investor Newsletter

Beyond Cash: Is There a New
Real Estate Advantage?

For years, cash buyers had a major advantage in real estate. They could move quickly, avoid financing contingencies and make their offers more attractive to sellers. But could that advantage be starting to fade?

According to Realtor.com, cash purchases represented 31.4% of U.S. home sales during the first four months of 2026, down from 32.3% a year earlier. Cash transactions also fell 11.2% year over year, compared with an 8.5% decline in total home sales. The shift may reflect a broader housing market rebalancing. The national median sale price rose just 0.2% year over year during the first four months of 2026, while borrowing costs remain elevated. Freddie Mac reported an average 30-year fixed mortgage rate of 6.66% as of August 27, 2026.

For SFR investors, the decline in cash purchases could mean fewer cash buyers competing for certain properties. If sellers have fewer cash offers to choose from, they may be more open to financed offers when the price, terms and closing timeline are competitive. This could give investors more flexibility while keeping cash available for other investments.

However, cash does remain common in certain parts of the market. Realtor.com found that more than two-thirds of homes priced below $100,000 and more than 40% of homes priced above $1 million were purchased with cash. Meanwhile, investors purchased approximately 534,000 homes in 2025, representing 11.3% of home purchases, according to Realtor.com. If fewer cash buyers are competing while investor demand stays strong, financing could give SFR investors another way to compete.

The takeaway for investors? The retreat of cash buyers may not create an immediate advantage, but it could be worth watching. Investors who understand their financing options and can move quickly may be better positioned as competition shifts. The strongest opportunity may not always go to the buyer with the most cash, but to the investor with the right strategy.

Did You Know: Cost Segregation Studies

Everything You Need to Know in 60 Seconds!

What is it? A cost segregation study looks at the different parts of a rental property to see which ones can be depreciated faster. This can allow investors to take some deductions sooner instead of spreading them out over the standard 27.5 years.

Who uses it? It’s mainly used by real estate investors and property owners who want to claim larger depreciation deductions sooner on their rental properties. A qualified tax professional or cost segregation specialist typically performs the study.

Where does it apply? Cost segregation can be used on residential rental properties, including single-family rentals, although whether it makes financial sense depends on the property and the investor's tax situation. The IRS specifically provides guidance for cost segregation studies involving residential rental property.

When should investors consider it? It is often considered when purchasing, constructing, or making significant improvements to a rental property. Investors can also look at existing properties, but the potential benefit depends on the property's cost, improvements, and tax circumstances.

Why does it matter? The goal is to potentially move some depreciation deductions into earlier years, which can reduce taxable income sooner and potentially improve near-term cash flow. It doesn't create new value in the property, it changes when certain costs may be deducted for tax purposes.

Investor Takeaway: A cost segregation study can be worth exploring for investors with higher-value rental properties or significant improvements, but the potential tax benefit varies from property to property. It is recommended to always work with a qualified tax professional to determine whether a study makes sense for your situation.

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Until Next Month!

The Stars and Stripes Homes, Inc. Team

Stars and Stripes Homes, Inc.

13741 E Rice Place Suite 105, Aurora, CO 80015

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