Is “Wall Street” the new big landlord on the block? The Wall Street Journal recently reported (via Realtor.com) about large investors transforming suburban neighborhoods by buying up single-family homes to become rental properties. The appearance of these large companies in neighborhoods has upended local sales & rental markets and caused spikes in rental rates. They point out that the rental-home business has traditionally been dominated by small investors and mom & pops with the big firms focusing on commercial properties, large multi-families, offices, etc. However, that appears to have changed in the wake of the housing crisis.
The buying spree amounts to a huge bet that the homeownership rate, which currently is hovering around a five-decade low, will stay low and that rents will continue to rise. The investors also are wagering that many people no longer see owning a home as an essential part of the American dream.
With fewer foreclosure properties available to buy, those firms have devised other ways to accumulate homes, including buying out rivals, building homes themselves, and buying properties one-by-one on the open market. They are focusing on places where they have gained scale through early foreclosure purchases, or around booming cities such as Nashville, Denver and Seattle.
Click here to read the full article on Realtor.com. (published in the Wall Street Journal on 7/21/17).
