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

[Glitch]

That actually sounds awesome. I'd love to live on some Alaskan land. Must be beautiful.

It is indeed beautiful, but also dangerous. I've experienced multiple earthquakes, two of them were magnitude 7.9, and I've been covered in volcanic ash twice since moving to Alaska in 1991. The wildlife are less of a problem, but still something to take into consideration. You cannot simply stroll through Alaska as if it were some city park. Just one mistake can be fatal. The rewards, however, are worth the extra effort.

This is my backyard:

 

[Luce]

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?

No, I think rich people should be allowed to squish poor people until poor people have enough and do drastic, alarming things to the rich people.

 

[noonereal]

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?

Of course not. Unless we ban apartment rental investors too.

 

[What if...?]

Millennials are the rental generation and I knew that would come back to bite us in the backside when people finally started accepting that paying the equivalent of a home mortgage to rent a one-bedroom apartment is stupid.

And what else were they supposed to do? It’s not legal to sleep outside of paid housing. Or in your car or an rv. Most landlords won’t let ten people live in a one bedroom.

So they paid what it cost to enjoy the privilege of shelter. The second most needed thing in life after food which is also a privilege.

Not rights. Privileges.

 

[Napoleon]

And what else were they supposed to do? It’s not legal to sleep outside of paid housing. Or in your car or an rv. Most landlords won’t let ten people live in a one bedroom.

So they paid what it cost to enjoy the privilege of shelter. The second most needed thing in life after food which is also a privilege.

Not rights. Privileges.

Millennials are just a generation of whiners. Despite the memes claiming it’s impossible - 48% of us own a home. The majority chose to rent long term and now regret that fact.

 

[OrphanSlug]

The more there are calls to regulate who buys we end up with counter calls to regulate who sells, then you pretty much discard market economics for government regulation whim expecting good things. Historically speaking that is insanity and has been a contribution in several economic disasters in the modern era.

 

[PeacefulWarrior]

I would rather see legislation versus regulation

Can you please explain the difference?

 

[PeacefulWarrior]

Millennials are just a generation of whiners. Despite the memes claiming it’s impossible - 48% of us own a home. The majority chose to rent long term and now regret that fact.

You say millennial are whiners, and then you apparently are a millennial judging from your post. LMAO. ijs

 

[Carjosse]

Millennials are the rental generation and I knew that would come back to bite us in the backside when people finally started accepting that paying the equivalent of a home mortgage to rent a one-bedroom apartment is stupid.

They always did know it was stupid, just the older generations never listened and just said we just needed to save more but that doesn't work when no amount of saving can match the growth in prices. I remember seeing an article that the vast majority of millenials and Gen Zs who buy homes in Canada buy them with financial assistance from their parents because it is basically impossible otherwise.

 

[washunut]

Can you please explain the difference?

One is done by bureaucrats the other by elected officials.

 

[Ginger Ale]

The more there are calls to regulate who buys we end up with counter calls to regulate who sells, then you pretty much discard market economics for government regulation whim expecting good things. Historically speaking that is insanity and has been a contribution in several economic disasters in the modern era.

If we truly ran like capitalism intended I could see your point, but we don't. I just wonder what it will mean for mom and pop renters, and new home buyers. These large companies already own over 30% of our housing, are you ok with 50%? This isn't including mom and pop renters.

I just wonder if we're making owning a rich persons game and if that's ok.

 

[Ginger Ale]

It is indeed beautiful, but also dangerous. I've experienced multiple earthquakes, two of them were magnitude 7.9, and I've been covered in volcanic ash twice since moving to Alaska in 1991. The wildlife are less of a problem, but still something to take into consideration. You cannot simply stroll through Alaska as if it were some city park. Just one mistake can be fatal. The rewards, however, are worth the extra effort.

This is my backyard:
View attachment 67382705

Oh wow! I'd probably die the first week, but man, I'd die happy.

 

[Ginger Ale]

Millennials are just a generation of whiners. Despite the memes claiming it’s impossible - 48% of us own a home. The majority chose to rent long term and now regret that fact.

IDK, I'd love to say that, but my kids have seen the likes I never have. They were born into 911, recessions, terrorists, wars, school shootings, mass shootings, a divided nation, and so much information I never knew at that age, and that would make me a whining baby as well.

It's not like we aren't all on here whining daily. It's the new thing to do.

The information age is a scary place. Now that I know how the world thinks, it's even worse.

In the 80's when I grew up, unless it happened to you, you didn't know about it. Ignorance was indeed bliss for my psyche. It allowed me to start out with little fear. My biggest annoyance was Valley Girls. lol

They're the first gen to have a lower life expectancy than their parents, and the first gen to earn less, with no pensions or stability in sight. They say they should expect some job hopping if they want to move up because it's rare to work your way up through a company anymore. It's definitely different now. I'd whine a little.

 

[Ginger Ale]

I mean......democrats are for the working class.......right?

Who's not for the working class?

 

[reflechissez]

What often happens is that the process gets exploited by the greedy and the government has to step in and clean up the mess. Subprime mortgages were intended to help increase minority homeownership, student loans were intended to make college affordable for low-income people.

I sense the same thing happening with this process. What will happen when investors move on to the next money-making scheme and unload the properties from their portfolios?

TLDR - Something ain't right. I said the same thing in 2006.

Sigh. No.

 

[reflechissez]

Millennials are the rental generation and I knew that would come back to bite us in the backside when people finally started accepting that paying the equivalent of a home mortgage to rent a one-bedroom apartment is stupid.

What are you talking about?

 

[Lursa]

If we truly ran like capitalism intended I could see your point, but we don't. I just wonder what it will mean for mom and pop renters, and new home buyers. These large companies already own over 30% of our housing, are you ok with 50%? This isn't including mom and pop renters.

I just wonder if we're making owning a rich persons game and if that's ok.

I'm not rich. I was 40 when I bought my first house. On a single income. A couple should be able to achieve that faster.

 

[post]

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.

"Flippers and investors" are influencing price as a result of the scale of the demand they put on the market, resulting in more demand for their
rentals as a consequence of their participation pricing potential buyers out of the market.

Investors were not "the market" in the pre-2007 run up to the last severe correction as they seem to be currently, in select markets, the
ones popular with "purchase to reside in" competing buyers.

INVESTOR INFLUX - Charlotte County Florida Weekly

IT’S NO SECRET THAT THE REAL ESTATE MARKET has been heating up nationally. So, in Florida, where real estate speculation has been part of the landscape since the early 20th century, homeowners seem to be receiving postcards weekly with investors’ offers to outright buy their houses, sight...

charlottecounty.floridaweekly.com

March 3, 2022
According to the online national real estate brokerage firm Redfin (www.redfin.com), investors purchased 18.4% of the homes sold in the United States during the fourth quarter of 2021, which was an increase from the 12.6% investors purchased a year earlier. Of those purchases, 74.8% nationally were single family homes. Jacksonville made the top three metro areas in the country in terms of these purchases, with 29.8% of homes bought by investors, which was more than double the number of purchases investors made in the North Florida metro the previous year. Among other Florida cities, Redfin listed investors as making 16.1% of the fourth quarter home purchases in the West Palm Beach metro area, 27.5% in Miami and 24.2% in Tampa..."

The housing market faces its biggest test yet

Soaring mortgage rates are locking some buyers out of the market.

fortune.com

Investors buying thousands of Phoenix-area homes as rent prices spike

Tenants say the result is rising rent prices, but economists say they’re not so sure investors are to blame.

www.azfamily.com

By Morgan Loew and Cody Lillich
Published: Mar. 18, 2022 at 10:40 PM EDT
PHOENIX (3TV/CBS 5) -- "Institutional real estate investors have turned their attention to the Phoenix housing market. Tenants say the result is rising rent prices, but economists say they’re not so sure investors are to blame.
According to Redfin, more than 30 percent of the homes sold in the Phoenix market in the third quarter of last year were bought by investors. The average rent has risen by roughly 30 percent over the past year..."

 

[Felis Leo]

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?

I did not watch the video, so I am not sure how Europeans regulate their housing markets.

My thought is this: Most of the situation could be resolved by rapidly expanding the housing supply, especially in states where housing is in high demand like California, rather than regulating the already-existing housing supply.

EDIT: But then, I also do not think non-U.S. citizens who are not legal permanent residents of the United States should be able to purchase American real estate for investment purposes.

 

[OrphanSlug]

If we truly ran like capitalism intended I could see your point, but we don't. I just wonder what it will mean for mom and pop renters, and new home buyers. These large companies already own over 30% of our housing, are you ok with 50%? This isn't including mom and pop renters.

I just wonder if we're making owning a rich persons game and if that's ok.

And your solution is exactly what?

 

[What if...?]

Millennials are just a generation of whiners. Despite the memes claiming it’s impossible - 48% of us own a home. The majority chose to rent long term and now regret that fact.

That’s weird. The majority of millennials I know of who own their homes inherited them or inherited the down payment. What percentage of that 48% inherited?

 

[Ginger Ale]

I'm not rich. I was 40 when I bought my first house. On a single income. A couple should be able to achieve that faster.

It isn't going to be like it was for you and me. I'm not so sure if the same opportunities will be available if we have a large wave of investment in rental properties like this, it's new. That's my whole point.

 

[Ginger Ale]

And your solution is exactly what?

I don't have one, but watching this made me consider having one. It also made me wonder what this new approach will have on our future. It reminds me of when Walmart swept through small town America and wiped out tons of small businesses. Obviously we embraced it, and now it's difficult to imagine opening up a small business that mega stores won't crush.

It seems to me we are going to have a few large corps owning most of America, with little small business or home ownership. My problem with that is what will we sell as the American Dream?

 

[Ginger Ale]

I did not watch the video, so I am not sure how Europeans regulate their housing markets.

My thought is this: Most of the situation could be resolved by rapidly expanding the housing supply, especially in states where housing is in high demand like California, rather than regulating the already-existing housing supply.

EDIT: But then, I also do not think non-U.S. citizens who are not legal permanent residents of the United States should be able to purchase American real estate for investment purposes.

The video isn't about the European Markets, it's just a 60 mins. on the mega housing rental companies in the U.S. and how much they're buying up.

I was just wondering if we should put a number of how much on it like some Euro companies have or we should just let it go and accept that it might be extremely hard to buy a home down the road instead of renting because of this.

 

[Trippy Trekker]

I make most of my income in the residential real estate game. My story: I don’t fit in with the large corporate Buyers. Some might call me rich. I maintain a 7-figure pocket that enables me to buy properties for cash, usually via Clerk Auctions competing against other informed cash bidders. My pocket includes substantial investments with Merrill Edge (they sent me 33 pages of 1099s for 2021) and Vanguard (almost exclusively S&P Index Fund Admiral shares). What I lost in security investments this year (100s of thousands$$$), I probably gained back in increased real estate equity. I sometimes offer to hold paper. Currently I hold only one private mortgage, a 1st (7.5% interest; pays out $2850/month) on a million dollar Clearwater Beach condo., I also gave away over $100,000 last year to church, family, pet causes, etc. I maintain two homes for personal use.

One of my brother-in-laws, along with one of his sons, each earn over 100K/year from me. They convert my ugly properties into masterpieces. Beautifully improved properties, no matter title issues or other issues, generate market interest. Due to a title problem, I kept one property last year as a rental, 905‘ sq. 1BR/1.5B condo, $1200/month (just raised it to $1250 March 1st). Happy 67 year old tenant pays on time every time, so I gave him a small below market increase.

I deal with numerous challenges: inspections, sub-contractor bids, rising prices for materials, availability of materials, title issues, complicated renovations, battles with real estate lenders and agents, permits, appraisals, contract provision interpretations, turn-around times, the list goes on and on! I employ a real estate attorney and title company on an as-needed basis. I rent 1360’ square warehouse and office suites from a slumlord. I expect to vacate mid to late July. I’d love to find a piece of land to build a pole barn on! I always need storage space.

My last flip closed in October. A small 2BR/1B went into contract full price (no co-broke) the first weekend I listed it ( I operate my own small real estate company). Buyer purchased with a 3% down Caliber Home loan. We closed in 30 days. I sold the home for more than three times what I paid for it. Renovation included structural repairs. Nice profit margin, enough to buy my wife’s nephew a full set of dental implants (he lost his teeth after a battle with Graves Disease).

I bought two more homes via Clerk Auction since that last flip, 3BR/2B in December and 2BR/2B pool home in January. Planning on flipping the 3/BR. I might keep the pool home, 10-minute drive to beach, for an AIRB&B.

I don’t find myself particularly focused on lobbying for any specific legislation. I do make an earnest effort to stay informed. As a Realtor, I benefit from the lobbying done by national, state and local Realtor organizations.

When my local school board supported a property tax increase, I spoke out against it at a public hearing. The measure barely passed. It increased property taxes about $200/home/year. The measure sunsets every four years.

When people, including family and friends, come to me for help in obtaining a rental, I usually steer them to companies that specialize in rentals.