Should America regulate investors buying up homes for rentals like they do in Europe?

[Ginger Ale]

Investors in America are buying up almost 30% of our homes and turning them into rentals. Many people are being priced out of buying the American Dream. They claim you can now "rent" the American dream. Do you think this is a good thing, or a bad thing?

Most investors don't even look at the homes they buy, and come in with cash and close in two weeks, very enticing for the sellers. This leaves people looking for a home out of luck if they don't have enormous amount of free cash, and let go of inspections, etc.

I'm unsure how I feel about this. Doesn't seem to be great for Americans, especially those just starting out, but it's really making a few very very rich.

Do you think this is just good ole' American business, or will we be screwed down the pike? Would you sell to an investor because it's such a quick and easy sell?

 

[washunut]

Investors in America are buying up almost 30% of our homes and turning them into rentals. Many people are being priced out of buying the American Dream. They claim you can now "rent" the American dream. Do you think this is a good thing, or a bad thing?

Most investors don't even look at the homes they buy, and come in with cash and close in two weeks, very enticing for the sellers. This leaves people looking for a home out of luck if they don't have enormous amount of free cash, and let go of inspections, etc.

I'm unsure how I feel about this. Doesn't seem to be great for Americans, especially those just starting out, but it's really making a few very very rich.

Do you think this is just good ole' American business, or will we be screwed down the pike? Would you sell to an investor because it's such a quick and easy sell?

This has been going on for more than a decade. I would rather see legislation versus regulation if there is a problem here.

 

[Surrealistik]

Investors in America are buying up almost 30% of our homes and turning them into rentals. Many people are being priced out of buying the American Dream. They claim you can now "rent" the American dream. Do you think this is a good thing, or a bad thing?

Most investors don't even look at the homes they buy, and come in with cash and close in two weeks, very enticing for the sellers. This leaves people looking for a home out of luck if they don't have enormous amount of free cash, and let go of inspections, etc.

I'm unsure how I feel about this. Doesn't seem to be great for Americans, especially those just starting out, but it's really making a few very very rich.

Do you think this is just good ole' American business, or will we be screwed down the pike? Would you sell to an investor because it's such a quick and easy sell?

This is what happens when you have massive inflation for investment assets specifically due largely to equally massive and sustained QE and historically low interest rates for over a decade that puts absolute tons of money overwhelmingly into the hands of rich people chasing a return (video title refers to 'hyper' inflation of investment assets, not recent inflation in consumer staples; that is largely a consequence of corporate gouging/abuse of pricing power):

How the Federal Reserve’s Monetary Policy Drives Housing Inequality - Non Profit News | Nonprofit Quarterly

While there are many drivers of the national crisis of housing affordability, one criterion that gets too little attention are Fed policies that inflate housing prices.

nonprofitquarterly.org

 

[Lursa]

Well here, right now, there are hardly any rentals. After the pandemic, and so many people got out of paying rent and couldnt be evicted, a lot of landlords, including me, pulled our units off the rental market. Luckily for me, the couple in mine split up and moved out April 2020. I considered putting it back up for rent...and then the state made evictions illegal and people didnt have to pay rent. The heck with that.

But anyway, there is a great shortage of rentals in the Seattle/Tacoma metro area. Houses are extremely expensive here, so in this situation, maybe they're providing a greater need?

 

[Ginger Ale]

Well here, right now, there are hardly any rentals. After the pandemic, and so many people got out of paying rent and couldnt be evicted, a lot of landlords, including me, pulled our units off the rental market. Luckily for me, the couple in mine split up and moved out April 2020. I considered putting it back up for rent...and then the state made evictions illegal and people didnt have to pay rent. The heck with that.

But anyway, there is a great shortage of rentals in the Seattle/Tacoma metro area. Houses are extremely expensive here, so in this situation, maybe they're providing a greater need?

Yeah, that's the spin from the corporation that is buying up thousands of houses, sight unseen, a year. Their profits are through the roof. He explains how the future is renting the American Dream, instead of buying it. I can see the point but also it seems sort of odd. I mean, they're making a profit, and rent is high. Nobody will be able to save up for a buy in the future.
This guy mostly buys in the sun belt. I didn't realize it was more than just small investors, it's a big business now.

Part of me thinks, wow, I should start buying up property, then part of me thinks it's sad that America is out pricing our motto.

 

[LostinThought]

I'm unsure how I feel about this. Doesn't seem to be great for Americans, especially those just starting out, but it's really making a few very very rich.

Do you think this is just good ole' American business, or will we be screwed down the pike? Would you sell to an investor because it's such a quick and easy sell?

It's most likely a problem with money issue being a thing, right now. People have a lot of financial burdens placed on them from the last few years, especially with some businesses that dropped workers due to pandemic scares and never paid out their final checks. Rare, though you do have issues of it popping up here and there.

Though this most likely only occurs in a few areas, ones where housing issues were already common and easily capitalized on.

 

[Noodlegawd]

Investors in America are buying up almost 30% of our homes and turning them into rentals. Many people are being priced out of buying the American Dream. They claim you can now "rent" the American dream. Do you think this is a good thing, or a bad thing?

Most investors don't even look at the homes they buy, and come in with cash and close in two weeks, very enticing for the sellers. This leaves people looking for a home out of luck if they don't have enormous amount of free cash, and let go of inspections, etc.

I'm unsure how I feel about this. Doesn't seem to be great for Americans, especially those just starting out, but it's really making a few very very rich.

Do you think this is just good ole' American business, or will we be screwed down the pike? Would you sell to an investor because it's such a quick and easy sell?

What would such a regulation look like?

 

[RetiredUSN]

Investors in America are buying up almost 30% of our homes and turning them into rentals. Many people are being priced out of buying the American Dream. They claim you can now "rent" the American dream. Do you think this is a good thing, or a bad thing?

Most investors don't even look at the homes they buy, and come in with cash and close in two weeks, very enticing for the sellers. This leaves people looking for a home out of luck if they don't have enormous amount of free cash, and let go of inspections, etc.

I'm unsure how I feel about this. Doesn't seem to be great for Americans, especially those just starting out, but it's really making a few very very rich.

Do you think this is just good ole' American business, or will we be screwed down the pike? Would you sell to an investor because it's such a quick and easy sell?

Write to Bernie Sanders and ask him WTF?

This should never happen under a liberal administration.................................RIGHT?

 

[Lursa]

Yeah, that's the spin from the corporation that is buying up thousands of houses, sight unseen, a year. Their profits are through the roof. He explains how the future is renting the American Dream, instead of buying it. I can see the point but also it seems sort of odd. I mean, they're making a profit, and rent is high. Nobody will be able to save up for a buy in the future.
This guy mostly buys in the sun belt. I didn't realize it was more than just small investors, it's a big business now.

Part of me thinks, wow, I should start buying up property, then part of me thinks it's sad that America is out pricing our motto.

But it's not spin here in this area. There is a very big shortage of affordable rentals and home prices are thru the roof.

My place is worth a very nice $$$$$$$$$$$$. I have to keep my gate locked to keep these people from continually knocking at my door to see if I want to sell. So they stuff my mailbox.

 

[Ginger Ale]

What would such a regulation look like?

I'm not sure, maybe a certain amount of rentals in a neighborhood? I know there is something like that set up for new builds. You have to wait a period of time before you can make them rentals.

England has rent control, so that they can't price out renters, and leave them homeless.

But I really haven't a clue. I just watched this and thought, wow, what does that leave out there for first time home buyers. I'm even in the business, doing plumbing for flippers and investors but I felt sort of conflicted watching how many people are getting rich doing this, and how hard it is in some places to find a home to buy if you're just a normal person.

 

[Ginger Ale]

Write to Bernie Sanders and ask him WTF?

This should never happen under a liberal administration.................................RIGHT?

Why wouldn't it?

 

[Ginger Ale]

But it's not spin here in this area. There is a very big shortage of affordable rentals and home prices are thru the roof.

My place is worth a very nice $$$$$$$$$$$$. I have to keep my gate locked to keep these people from continually knocking at my door to see if I want to sell. So they stuff my mailbox.

If you did sell, could you afford to buy in that kind of market? My house has quadrupled in the last 10 years but I find that so has everyone else's. And, like they mention in the video, these investors come in with full cash offers, and no inspections or anything. It's hard to beat that if you're just a couple wanting a home.
My concern is that since it's becoming quite lucrative for large companies to do this, what will that translate to down the road? Only renting the American dream, with a rented white picked fence?

I just wanted to see what everyone else thinks. I'm not sure where to go with it.

 

[Glitch]

Investors in America are buying up almost 30% of our homes and turning them into rentals. Many people are being priced out of buying the American Dream. They claim you can now "rent" the American dream. Do you think this is a good thing, or a bad thing?

Most investors don't even look at the homes they buy, and come in with cash and close in two weeks, very enticing for the sellers. This leaves people looking for a home out of luck if they don't have enormous amount of free cash, and let go of inspections, etc.

I'm unsure how I feel about this. Doesn't seem to be great for Americans, especially those just starting out, but it's really making a few very very rich.

Do you think this is just good ole' American business, or will we be screwed down the pike? Would you sell to an investor because it's such a quick and easy sell?

It sounds to me like the investors are the ones living the American dream. Why would that be a bad thing?

When you don't build enough homes for the population in a given area you can expect home prices to rise. The city of Anchorage, for example, has never built enough homes for its population, as a result the median home price is $450,000. Whereas, if you wanted to buy the exact same home on four times the amount of land outside of the city of Anchorage, you might pay $150,000.

I ended up buying an empty plot of land and building my own home. When there isn't enough preexisting homes, build your own.

 

[Ginger Ale]

It sounds to me like the investors are the ones living the American dream. Why would that be a bad thing?

When you don't build enough homes for the population in a given area you can expect home prices to rise. The city of Anchorage, for example, has never built enough homes for its population, as a result the median home price is $450,000. Whereas, if you wanted to buy the exact same home on four times the amount of land outside of the city of Anchorage, you might pay $150,000.

I ended up buying an empty plot of land and building my own home. When there isn't enough preexisting homes, build your own.

Yeah, I'm in the business so I know what you mean but I also know we lack people to do that. I have a hard time finding qualified trades people and that's just getting worse and they can demand their price now. Who's going to build them? The land is also going up because people know of this problem, and a contractor will charge you plenty to build it now, because they know, and it will take years to finish it. Hell, mobile homes went up because of it.

I guess we'll just have to see how this plays out in the future, but, I'm sure plenty of people have kids growing into this market, so hopefully they pass their home down. It's not going to be the same America, it's starting to feel more like Europe, where it's expensive, and limited. So, maybe an American slogan change will be in order.

 

[Glitch]

If you did sell, could you afford to buy in that kind of market? My house has quadrupled in the last 10 years but I find that so has everyone else's. And, like they mention in the video, these investors come in with full cash offers, and no inspections or anything. It's hard to beat that if you're just a couple wanting a home.
My concern is that since it's becoming quite lucrative for large companies to do this, what will that translate to down the road? Only renting the American dream, with a rented white picked fence?

I just wanted to see what everyone else thinks. I'm not sure where to go with it.

If I sold my home I could easily find someplace cheaper and bigger, even though the value of my home has only increased by 150% over the last 20 years. However, I would not be happy in the area that I would be living in, which is why I haven't moved. It isn't always about the price. Location also matters.

Businesses exist to make a profit. Regardless of what they are offering for a home, if they didn't believe that they could turn around and sell the home for a profit they wouldn't be buying the home. Rentals properties are not a lucrative business. Besides the cost of the mortgage, interest, property taxes, and insurance, there is also maintenance costs. If your income is dependent upon renters, then you will want to keep your rents as affordable as possible while still making a profit. It would be stupid, not to mention counter-productive, to increase your rent so high that nobody could afford it.

 

[Glitch]

Yeah, that's the spin from the corporation that is buying up thousands of houses, sight unseen, a year. Their profits are through the roof. He explains how the future is renting the American Dream, instead of buying it. I can see the point but also it seems sort of odd. I mean, they're making a profit, and rent is high. Nobody will be able to save up for a buy in the future.
This guy mostly buys in the sun belt. I didn't realize it was more than just small investors, it's a big business now.

Part of me thinks, wow, I should start buying up property, then part of me thinks it's sad that America is out pricing our motto.

That is how a lot of people got rich. They bought lots of property. They had to buy lots and lots of property, because the profit margin from just one property is very small.

Those who don't take care of the property they own become known as "slumlords." Which was more a thing of the past than with current times, although they still exist. Most States have laws that deal with slumlords these days.

If you are going to invest in property, you should also look into hiring a property management company. Unless, of course, you intend to do all the maintenance work yourself. That is one more overhead expense that will eat into your profit margin.

 

[Glitch]

Yeah, I'm in the business so I know what you mean but I also know we lack people to do that. I have a hard time finding qualified trades people and that's just getting worse and they can demand their price now. Who's going to build them? The land is also going up because people know of this problem, and a contractor will charge you plenty to build it now, because they know, and it will take years to finish it. Hell, mobile homes went up because of it.

I guess we'll just have to see how this plays out in the future, but, I'm sure plenty of people have kids growing into this market, so hopefully they pass their home down. It's not going to be the same America, it's starting to feel more like Europe, where it's expensive, and limited. So, maybe an American slogan change will be in order.

I bought the bare land initially, and as soon as I sunk a well and built the septic system the value of the land instantly tripled in value. The value of the home, however, has not been increasing nearly as quickly. For which I'm grateful. Alaska may not have any State sales or income taxes, but I'm paying 18 mills on my property.

There are places in Alaska where I could move that have no property taxes, but they are too far away from the salmon laden rivers that I have come to depend upon.

Don't underestimate the ingenuity of today's youth. There are creative ways to buy property, and it will always be a struggle for every generation. When my parents bought their home in the 1950s it cost less than the price of a car today. My own home cost more than a decade of my father's peak income. Future generations can expect even more difficulties because the population continues to increase and that means more resources are required.

 

[Surrealistik]

It's most likely a problem with money issue being a thing, right now. People have a lot of financial burdens placed on them from the last few years, especially with some businesses that dropped workers due to pandemic scares and never paid out their final checks. Rare, though you do have issues of it popping up here and there.

Though this most likely only occurs in a few areas, ones where housing issues were already common and easily capitalized on.

Thing is it's been an ongoing issue for a long time that's merely only intensified recently.

More than anything else it comes to increased financialization of housing by wealthy people (and not just the domestically wealthy; this is true of investors globally) looking for a place to park their leveraged cash for a return that well exceeds the close to the 0% interest they're paying on said money (and it ain't the rents that drives the returns more often than not; it's the capital gains); a trend that is echoed in virtually every other investment asset, hence their rapid and consistent inflation over time.

Unwinding this situation is definitely a problem given how dependent the economy has gotten on these low interest rates (again a global phenomenon); any significant increase in a short period of time is going to create a devastating economic shock, particularly given the high levels of debt nationwide. The best approach would probably be to, in addition to very slowly normalizing interest rates over a long period of time within the economy's tolerance, impose taxes/financial penalties on the acquisition (not construction) and accumulation/holding of homes/residential units for investment purposes.

 

[LostinThought]

Thing is it's been an ongoing issue for a long time that's merely only intensified recently.

More than anything else it comes to increased financialization of housing by wealthy people (and not just the domestically wealthy; this is true of investors globally) looking for a place to park their leveraged cash for a return that well exceeds the close to the 0% interest they're paying on said money (and it ain't the rents that drives the returns more often than not; it's the capital gains); a trend that is echoed in virtually every other investment asset, hence their rapid and consistent inflation over time.

Unwinding this situation is definitely a problem given how dependent the economy has gotten on these low interest rates (again a global phenomenon); any significant increase in a short period of time is going to create a devastating economic shock, particularly given the high levels of debt nationwide. The best approach would probably be to, in addition to very slowly normalizing interest rates over a long period of time within the economy's tolerance, impose taxes/financial penalties on the acquisition (not construction) and accumulation/holding of homes/residential units for investment purposes.

I had heard issues with the housing market along those same lines, though I can't really think of any places that such purchase would happen. Except for higher end metropolitan areas, maybe. I can easily understand someone purchasing real estate in someplace like California, Texas or even Montana of all places.
It's just that places like inner city build areas and industrial zones, tend not to catch my eye in that regard.

 

[What if...?]

Investors in America are buying up almost 30% of our homes and turning them into rentals. Many people are being priced out of buying the American Dream. They claim you can now "rent" the American dream. Do you think this is a good thing, or a bad thing?

Most investors don't even look at the homes they buy, and come in with cash and close in two weeks, very enticing for the sellers. This leaves people looking for a home out of luck if they don't have enormous amount of free cash, and let go of inspections, etc.

I'm unsure how I feel about this. Doesn't seem to be great for Americans, especially those just starting out, but it's really making a few very very rich.

Do you think this is just good ole' American business, or will we be screwed down the pike? Would you sell to an investor because it's such a quick and easy sell?

It’s the Company Store model. After they get some of what they pay us back in rent they’ll buy all the grocery stores, pay us in scrip. Just enough to live. And if you want a cookie you’ll have to borrow. And before long you’ll load sixteen tons and end up deeper in debt.

It is far more profitable to rent people homes for their entire life than to let them get off that treadmill through ownership.

It’s obviously a racket. If it was about people and shelter the entire industry wouldn’t be fighting things like tiny homes with lobbyists and campaign contributions. There would be a way to permit my modular, expandable housing system. So the home could grow with the family that lives in it.

 

[What if...?]

Well here, right now, there are hardly any rentals. After the pandemic, and so many people got out of paying rent and couldnt be evicted, a lot of landlords, including me, pulled our units off the rental market. Luckily for me, the couple in mine split up and moved out April 2020. I considered putting it back up for rent...and then the state made evictions illegal and people didnt have to pay rent. The heck with that.

But anyway, there is a great shortage of rentals in the Seattle/Tacoma metro area. Houses are extremely expensive here, so in this situation, maybe they're providing a greater need?

They’ll charge what the mortgage payment would be like landlords do all over. Fewer homes for sale means higher prices, higher prices justify higher rents. And it’s really hard to save for a down payment while paying someone else’s mortgage.

The peasant is the go to replacement for the pension. This has been driving up rents and home costs for a while now.

 

[What if...?]

I'm not sure, maybe a certain amount of rentals in a neighborhood? I know there is something like that set up for new builds. You have to wait a period of time before you can make them rentals.

England has rent control, so that they can't price out renters, and leave them homeless.

But I really haven't a clue. I just watched this and thought, wow, what does that leave out there for first time home buyers. I'm even in the business, doing plumbing for flippers and investors but I felt sort of conflicted watching how many people are getting rich doing this, and how hard it is in some places to find a home to buy if you're just a normal person.

I’ve always thought the solution is to steeply progressively tax rentals. Like the first is regularly taxed, even multi unit. But the next is much more and the third prohibitive and a fourth no profit at all. Or some variant that allows for a retirement income property but discourages corporate ownership.

 

[What if...?]

If I sold my home I could easily find someplace cheaper and bigger, even though the value of my home has only increased by 150% over the last 20 years. However, I would not be happy in the area that I would be living in, which is why I haven't moved. It isn't always about the price. Location also matters.

Businesses exist to make a profit. Regardless of what they are offering for a home, if they didn't believe that they could turn around and sell the home for a profit they wouldn't be buying the home. Rentals properties are not a lucrative business. Besides the cost of the mortgage, interest, property taxes, and insurance, there is also maintenance costs. If your income is dependent upon renters, then you will want to keep your rents as affordable as possible while still making a profit. It would be stupid, not to mention counter-productive, to increase your rent so high that nobody could afford it.

Rent is already the mortgage payment and interest, property taxes here in so cal. And that is spreading to wherever the speculators see a profit.

So they get a mortgage payment forever istead of thirty years. Plus the asset to invest with.

 

[Gateman_Wen]

Investors in America are buying up almost 30% of our homes and turning them into rentals. Many people are being priced out of buying the American Dream. They claim you can now "rent" the American dream. Do you think this is a good thing, or a bad thing?

Most investors don't even look at the homes they buy, and come in with cash and close in two weeks, very enticing for the sellers. This leaves people looking for a home out of luck if they don't have enormous amount of free cash, and let go of inspections, etc.

I'm unsure how I feel about this. Doesn't seem to be great for Americans, especially those just starting out, but it's really making a few very very rich.

Do you think this is just good ole' American business, or will we be screwed down the pike? Would you sell to an investor because it's such a quick and easy sell?

It's bad. "screwed down the pike" as you said. Pricing approximately 3/4ths of young Americans out of the market. Home ownership provides stability, financially and otherwise.

 

[BirdinHand]

Oh please…flippers and investors have been around for decades and became more popular with tv shows on every DIY network making it seem “easy”.

No one cried when these people lost their shirts in 2007-2008 when the last housing bubble popped and no one will care when the next one pops.

If you want a house…save up and buy one. No one is guaranteed a 3 bedroom with a picket fence by age 28 or 30 simply because that’s what they want.

If you can’t afford to buy where you WANT to live, then reevaluate.

These investors lay out money and often do a great deal of renovations to property. They aren’t walking in and buying the top of the line houses in a neighborhood, they’re buying the ones that need work. Sometimes a LOT of expensive work.

And if people didn’t buy houses at insane rates or pay insane rents, then houses wouldn’t cost what they do - and rent wouldn’t be as high as it is in some places.