Should Homeowner Groups Stop Investors From Buying Houses to Rent?

[Rmay635703]

In other countries
It is commonplace to ban actual corporations and foreign absentee owners from buying up extensive amounts of property.

In a scenario like what played out in 2020 you have institutional investors flush with cash buying up nearly all available properties with no heed to the risk, there is good reason to ban such things

 

[BMWTurboDzl]

Those articles aren't about a landlord buying a single (or even a few) properties as investment income.

This is about venture capital-backed corporate ownership: BlackRock, pension funds, and banks. They began buying residential real estate as an investment to offset the hits they were taking on commercial properties that were sitting unused because of the pandemic. They've been gobbling up massive amounts of residential real estate in the past few years.

From an individual homeowner perspective, the properties they turn into rental units are typically run by a management company. Say what you will about certain landlords, at least there's somebody to drive issues to. Property management company? Not so much. You really think they care about complaining neighbors? As long as the tenant is sending in checks, everything is running like it should.

At a larger perspective, residential homeownership is the biggest driver of wealth in the country. The biggest asset on most people balance sheet is their home. Owning a home is typically the first step to building your personal balance sheet and that typically even extends to your children, creating generational wealth. Homes occupied by their owner have a natural incentive to maintain their investment. This is how neighborhoods are made. Structured buying of those properties, with some localities are showing corporate investors buying more than 25% of available housing stock, prevents this wealth and these neighborhoods from developing. It prevents people from buying homes, it keeps them in rentals longer, it stops the creation of wealth, and it damages communities.

Ya. There are tract builders who are building out neighborhoods and selling to these companies. The deeper solution is to find out why these companies have to buy up residential REO vs more traditional avenues of investment.

 

[Trashman]

Ban it at the federal level. I'm not in the group that generally calls for that kind of thing (quite the opposite actually), but this is getting ridiculous. Normal hard working folks are priced out of buying a house because of this type of thing, and landlords (both individual and big business) are jacking rent up to the point where folks can't afford a mortgage, and cannot afford rent. LLC, BlackRock etc.... ban it all. FYI, my house is paid off, but for those hard working folks looking to buy a house that was 250,000, now it's 500,000 or 600,000, or just looking to rent a place that was 1,000 per month and now it's over 2,500 per month because of greedy landlords. I truly feel bad. Let the flogging begin.....

 

[chrlsful]

I live in "5 College Area". We have the flagship instut for the state's 4 or 5 colleges in our town (close to 50/50 on student pop v residents). The college (regents, tax payers, etc) do not keep dorm space up w/rising student pop. We actually have student gentrification (most of housing is snapped up by cash -in-hand, converted from fam to student absentee landlord rentals. Out fams & new have -0- starter home affordability. Cost rose/is rising w a y beyond stats. One solution is CLT but we need state'n fed assistance, too big for one tool. The country (world?) hasa housing affordabilit problem.

Ya. There are tract builders who are building out neighborhoods and selling to these companies. The deeper solution is to find out why these companies have to buy up residential REO vs more traditional avenues of investment.

rhis country has breaks for realitors/land owners (speculators) - comercial & residential. So good foriegn companies come here to make their $ off us.

 

[Wolf359]

It's basically a knee jerk reaction to a bigger problem that owners have caused due to NIMBY. There's no supply. Real answer is to build more so anyone can buy up whatever they want. You don't really get free markets when you start banning things. You're only putting a band aid on the problem. So owners have created the problem where they don't want any new development and now you want additional problems by allowing them to ban corporate purchases.

 

[Trashman]

In other countries
It is commonplace to ban actual corporations and foreign absentee owners from buying up extensive amounts of property.

In a scenario like what played out in 2020 you have institutional investors flush with cash buying up nearly all available properties with no heed to the risk, there is good reason to ban such things

Amen

 

[K.Aoi]

I think cities/states need to implement some sort of law that limits the percentage of units for rent vs owner occupy, and the amount of airbnb/other short term rental.

Landlords in general serve no purpose but to be middlemen, and while there are some good landlords, these days the majority are corporate entities with dozens/hundreds of units. And they prey on the people who need low cost housing the most, that is to say lower-income folks. More places also need to implement limits on how much rent can be raised per year. Albany county NY for instance has a law limiting the annual increase to 5%. Areas nearby have seen people's rents being raised 25%+ in recent memory. Landlords want to advertise "luxury" apartments that command a premium, not affordable housing for normal people. People need places to live and predatory landlords are pricing people out of their homes.

That's not even talking about the pandemic of airbnbs. Saratoga Springs for instance has seen lots of people being refused lease renewals so they can convert their unit into airbnb for the lucrative couple month track season, and the rest of the year they'll lie empty. Again these aren't homeowners who happen to own more than one property, they are usually corporate-owned professional renting companies who's sole purpose is to be vampires on society.

 

[Wolf359]

I think cities/states need to implement some sort of law that limits the percentage of units for rent vs owner occupy, and the amount of airbnb/other short term rental.

Landlords in general serve no purpose but to be middlemen, and while there are some good landlords, these days the majority are corporate entities with dozens/hundreds of units. And they prey on the people who need low cost housing the most, that is to say lower-income folks. More places also need to implement limits on how much rent can be raised per year. Albany county NY for instance has a law limiting the annual increase to 5%. Areas nearby have seen people's rents being raised 25%+ in recent memory. Landlords want to advertise "luxury" apartments that command a premium, not affordable housing for normal people. People need places to live and predatory landlords are pricing people out of their homes.

That's not even talking about the pandemic of airbnbs. Saratoga Springs for instance has seen lots of people being refused lease renewals so they can convert their unit into airbnb for the lucrative couple month track season, and the rest of the year they'll lie empty. Again these aren't homeowners who happen to own more than one property, they are usually corporate-owned professional renting companies who's sole purpose is to be vampires on society.

They reap what they sow. The world is full of middlemen. Walmart is the largest retailer and they're middlemen.

Now you have inflation running at 8.5% but you have a 5% limit on increases? My property taxes and insurance really shot up this year, only way to recoup that is by raising rents more than 5%.

AirBnB serve a purpose in that it's popular because it's cheaper than a hotel or you get more room than a hotel so they do serve a purpose. Uber kinda served a purpose because taxi prices were too high and hard to get. There wasn't enough supply. Your main problem with all this is that the demand is high because of a lack of supply. It's the owners that are causing the lack of supply by putting in too many rules/voting for things that prevent supply. So now the answer is to prevent more supply.

 

[chrlsful]

no, a national answer is to have more housing.

 

[ATex7239]

Our HOA has a limit to the amount of rentals allowed in the neighbor and the property must be owned by a person not a Corp. I wish no rentals were allowed as the tenants are hit or miss. The house next to mine was privately owned but now it’s a rental. Some of the tenants have been great and are wonderful people. The others have been trash.

We’ve rented houses before and we treated the property with respect not like a flop house.

 

[Trashman]

no, a national answer is to have more housing.

They are building like crazy, but who is buying these new homes? The very folks creating the problem... If they were banned, that would get rid of the root of the problem. No big corporations, no foreign owners of any kind, no LLC's. But that would require a lot of these greedy landlords to stop getting rich off of the backs of hardworking, normal folks, and heaven forbid we have that.

 

[Wolf359]

It's funny how people will talk about it being a free country but have no problems with restricting property rights if it doesn't really affect them. If these rules/laws get passed, landlords won't be compensated for the rights they lost either.

 

[Wolf359]

They are building like crazy, but who is buying these new homes? The very folks creating the problem... If they were banned, that would get rid of the root of the problem. No big corporations, no foreign owners of any kind, no LLC's. But that would require a lot of these greedy landlords to stop getting rich off of the backs of hardworking, normal folks, and heaven forbid we have that.

One question is if there are no landlords and housing prices are unaffordable, where are the renters going to live? Obviously not where there are no rentals. I remember one renter who was a bartender asking how much it was going to be rent a particular apartment. I told her it was $6k and she say, wow, that's a lot of money. That meant she didn't have the money. It's always a lot of money when you don't have it. People who can't afford to even put together 6k for deposits like first/last/security for an apartment are not going to be able to buy.

 

[alarmguy]

Im all for HOAs preventing homes from being rented and I am sure many do.
Its a free country and HOAs are free to write that homes be owner occupied.

With that said, when it comes time to sell, highest bidder gets my property, whether its a Wall Street Firm or newlywed couple.
My property, my decision.

I dont see any problems in the USA housing industry.

 

[Pew]

One question is if there are no landlords and housing prices are unaffordable, where are the renters going to live? Obviously not where there are no rentals. I remember one renter who was a bartender asking how much it was going to be rent a particular apartment. I told her it was $6k and she say, wow, that's a lot of money. That meant she didn't have the money. It's always a lot of money when you don't have it. People who can't afford to even put together 6k for deposits like first/last/security for an apartment are not going to be able to buy.

You think $6000 is for first/last month and a security deposit (let's just say the security deposit is the same as rent) for just an apartment falls under affordable?

 

[alarmguy]

You think $6000 is for first/last month and a security deposit (let's just say the security deposit is the same as rent) for just an apartment falls under affordable?

I think its affordable to whomever can pay it. It wouldnt be $6000 if no one could pay it. Based on this statement the rent is only $2000 a month.

 

[Rmay635703]

It's funny how people will talk about it being a free country but have no problems with restricting property rights if it doesn't really affect them. If these rules/laws get passed, landlords won't be compensated for the rights they lost either.

Our country has never provided absolute freedom or even close
Corporations and Foreign influences have historically been under the governments thumb for good reason, literally every other country imposes severe limits on vast foreign ownership and corporate monopolies except of coarse us.


When you have something worse than the US government buying up all property there is a problem ,
And imagine if you would if instead of a foreign company it were the us government buying homes, to the guy on the street the affect is no different but imagine the difference in response?

What’s worse is the type of cascading failure that will occur when a large percentage of the population stops paying rent and mortgage because the market price has grown out of proportion to wages.

We are only about 1 month away from that happening , if literally anything happens during this recovery and jobs are affected

 

[jeepman3071]

Im all for HOAs preventing homes from being rented and I am sure many do.
Its a free country and HOAs are free to write that homes be owner occupied.

With that said, when it comes time to sell, highest bidder gets my property, whether its a Wall Street Firm or newlywed couple.
My property, my decision.

I dont see any problems in the USA housing industry.

I'm guessing you haven't tried to buy a home recently...

It's easy to say there is not an issue if you are selling a car or selling a home, but try being on the buying end. You can sell your home to the highest bidder, no issues with that, but then you'll end up overpaying for whatever you try to buy next. I'm seeing small POS houses that need tons of work sell for $50,000 over asking price, because companies will come in and out-bid everyone else.

With salaries not increasing with inflation it's just unsustainable. I work at a University and they are having trouble hiring entry level positions, because nobody can afford to live here, even renting. Entry level people are being priced out of the area, which again is unsustainable. I'm nervous for my state, we have a large percentage of the state workforce retiring soon, entire state departments that will have nobody running them, and we can't hire replacements. Not everyone can/should make $150k a year.

 

[Wolf359]

You think $6000 is for first/last month and a security deposit (let's just say the security deposit is the same as rent) for just an apartment falls under affordable?

I never said that it was affordable. Just that if they can't even afford 6k to rent, how are they even going to be able to buy?

 

[Trashman]

One question is if there are no landlords and housing prices are unaffordable, where are the renters going to live? Obviously not where there are no rentals. I remember one renter who was a bartender asking how much it was going to be rent a particular apartment. I told her it was $6k and she say, wow, that's a lot of money. That meant she didn't have the money. It's always a lot of money when you don't have it. People who can't afford to even put together 6k for deposits like first/last/security for an apartment are not going to be able to buy.

I agree with you in that aspect, although obviously not in the bigger picture. If a guy owns one house as a rental, say his starter house, then he upgraded and now has a nicer house, and rents out his starter house, no problem. There is always a need for a rental, young folks just getting started, folks moving to a new place etc. So yes, rentals are necessary. But folks who go out and buy multiple houses just to profit off of normal folks end up driving up the price of homes. Whether you agree or disagree, it's true. Of course greedy folks with multiple rentals who sit up on their high horse disagree with me, that is not a surprise at all.