Companies go home-shopping around Metro area (apartments, renters, HOA)

[LynnHarris]

In the long run, I wonder if this will be good for the metro-area housing market. I am happy these homes are being bought, but I hope these investors don't turn out to be slumlords.


Companies go home-shopping around Metro area | www.ajc.com

[ATLTJL]

Probably not good in the long run. When was the last time you ever heard of a bunch of renters making the neighborhood better?

But it is capitalism, so what can you do? Even though they can be very annoying at times, it's good to have an HOA that caps the number of rentals.

[arjay57]

I've read that a number of these companies are backed by some of the same Wall Street players who played a big role in creating the housing crisis in the first place. Pretty ironic, and sad for the middle class and the little people of the world.

[LynnHarris]

I would rather see these homes go to buyers instead of investors. According to the article, a lot of homebuyers are getting "out bid" by these investors because they have heavy financial backing.

[arjay57]

Good point, Lynn. These buyers are typically corporate or hedge funds with mega-wealthy investors. They're always going to be able to outbid the typical individual.

[ATLTJL]

And they're planning on making lots of money renting the houses out.

You don't make lots of money by spending lots of money keeping the houses impeccably maintained at all times.

Sure, there may be some companies that specialize in luxury homes and do keep them up to attract luxury renters. But the article said most of the homes are in the sub $200k range, so I would imagine they will try to get by with the cheapest fixtures, fixing everything as cheaply as possible, etc. Probably not very good for the neighborhood long term.

[belleislerunner]

An investor will buy 30 homes for 100K which equates to $30 million.

The part that amuses me the most is how these investors think they will find someone else to purchase the homes in the future at a profit. Most majority single family rental areas steadily decline in value as the tenants have no motivation to upkeep the property (e.g. nice landscaping etc). This leads to homeowners in the same neighborhood neglecting their properties and a downward neighborhood spiral. You, as an investor, can't flip your rental homes if no one even wants to live in them as owners.

[cittic10]

I can't argue with any of the points that have been made but I would just like to say that if these suckers -- er I mean investors-- start buying up the properties and sopping up some of the surplus housing, I think this will be good news for sellers.

When the surplus inventory goes bye bye, then the prices will go up and people who want to sell can finally get out.

belleislerunner and TJL both make valid points. Renters seldom (never) add value to a property and rarely (never) maintain the property as well as an owner. But! that's really neither here nor there since the name of the game is evaporating inventory. Even though neighborhoods can be destroyed by unkempt properties, if there's nowhere else to live, the prices are going to go up regardless. Again, that's great if you're wanting to leave. Not so great if you're planning on living in the same place. At least you'll be able to sell and move on up to the east side, to that de-luxe apartment in the sky. (I don't think the Chinese slum lords are buying deluxe apartments in the sky but I could be wrong)

There will be a short window to get out before the builders are able to get the financing they need to put their McHouse building machines back into full swing again before the bubble bursts again.

[FromGA]

Originally Posted by cittic10

I can't argue with any of the points that have been made but I would just like to say that if these suckers -- er I mean investors-- start buying up the properties and sopping up some of the surplus housing, I think this will be good news for sellers.

When the surplus inventory goes bye bye, then the prices will go up and people who want to sell can finally get out.

belleislerunner and TJL both make valid points. Renters seldom (never) add value to a property and rarely (never) maintain the property as well as an owner. But! that's really neither here nor there since the name of the game is evaporating inventory. Even though neighborhoods can be destroyed by unkempt properties, if there's nowhere else to live, the prices are going to go up regardless. Again, that's great if you're wanting to leave. Not so great if you're planning on living in the same place.

For these invesotrs -- if the area retains value, they could sell. If not, they could keep renting out the place. Probably that is the logic?

Originally Posted by cittic10

At least you'll be able to sell and move on up to the east side, to that de-luxe apartment in the sky. (I don't think the Chinese slum lords are buying deluxe apartments in the sky but I could be wrong)

There will be a short window to get out before the builders are able to get the financing they need to put their McHouse building machines back into full swing again before the bubble bursts again.

Which area are you talking about?

[ATLTJL]