Risks to Small Investors

[James M.]

"If you build to rent, be aware that many hedge funds are buying rental properties and that the rental market has gotten to be very competitive." - Harry Dent, The Demographic Cliff, 2014, page 97.

One of the things that I have wondered about as a small investor is risk. I have three properties and am working my way to ten. I am considering risk factors to be aware of as an investor.

How do hedge funds hold the ability to affect a local rental market? What would happen in a down market? Thoughts?