Not a political discussion, but the current regime is considering banning the purchase of single family homes for investment purposes. personally I think it’s a long overdue move. Thoughts?
National ban on investment home buying
byu/Future_Relief1188 inRealEstate
Posted by Future_Relief1188
23 Comments
Finally someone with some sense. These investment firms have been absolutely destroying the housing market for regular families trying to buy their first home
It’s a good idea, but it won’t take them long to find a way around it, like spinning up a million LLCs to split their ownership into. But at least having a law on the books that large investment groups cannot buy homes would help a lot.
Ok so what’s going to happen to all the SF REITs?
Good!
Not gonna happen. Just going to make the numbers wiggle until it gets walked back.
To clarify OP: That is NOT what is being proposed. I could still personally own 5 homes and 4 for purely investment(personal) reasons. What is being proposed is that investment firms can no longer do this. I agree with that, btw, but just wanted to clarify.
Needs to happen. In my old neighborhood, every single house that went up for sale was bought up by investors and turned into a rental property. Ruined the whole neighborhood and played havoc with property values.
Those investors donate a lot of money, so it’s not going to happen
Wont happen. To many legal challenges. I applaud the President for saying this but nothing will come out of it. We need lower rates, more federal land freed up, and less regulation.
Considering it was 45s Administration that allowed it to happen in the first place…
It’s for large institutional buyers not investment in general and like everything people will find ways around it and grey areas
This will be hard to enforce, what is an institution investor? Presumably not all corporations will be banned otherwise it will affect small investors. Could you have many small corporations that own properties that roll up into a real estate fund? Could Blackrock lease a home for 99 years from a bank they partner with?
It’s good idea!
Impossible goal.
you could still buy it, live in it, then move out and rent it. A law cannot force you to sell a house you don’t live in, people move all the time for different reasons, that’s absurd.
You need to reread what he/they are planning. It’s not a ban on all investment property purchases, but only for large investors (owning 5 or more properties). Currently, large investors own less than 5% of all SFH homes in the US. Pretty much statistically insignificant, at least from a macroeconomic perspective. This will change little to nothing across the US, most likely to only affect the market in areas where there are larger amounts of investment purchases (Midwest and Sunbelt come to mind).
A fairly significant percentage of new build homes are being built specifically to be rentals, by the same home builders that would be building subdivision trash homes.
Think it’s market manipulation. Stocks in related tickers are down a good bit. Once folks have taken profits he’ll walk it back or there will be announcement of a blocker. See tariffs and TACO
I was hoping it would go further but this is a start. Whether it stands up to a court challenge remains to be seen.
The Fed created this problem by printing trillions and handing it to the rich. I don’t trust government to fix it.
It is a horrible idea, IMHO.
There are a whole bunch of mom and pop landlords out there. Folks who own one or two other homes. The overwhelming majority of these folks are making very little profit and providing a rental at a good market value. They have no interest in driving up the price of the property (because that means more property tax!) or the adjacent homes. They have no real interest in driving up rent either. They would much rather a place be continuously rented for $100 / month below market than have it rented sporadically for $300 / month above market.
The main value for these mom and pop landlords is in the equity. They are probably coming VERY close to breaking even on their property. Definitely not making tens of thousands of dollars a year. What they ARE doing is building equity. After 30 years of renting out that property – and probably losing 20K – 50K or so on the upkeep and maintenance along the way – they will finally own it outright. And then that becomes retirement income.
These landlords / private investors are not the problem. But outlawing them will get rid of them.
The problem is the big mega-investment firms who are buying up everything and can afford to sit on it. They will buy everything and drive up prices. Make minor renovations and double the rent. and if no one is buying or renting? Buy up more until you own it all and they have no CHOICE but to pay your rates. THOSE guys are the problem.
But, see, like pretty much all laws which are proposed to tackle these types of problems, all it does is get rid of the little (read; good) guy. The mega-corps find loopholes, workarounds, and dodges. And now that the little guy is driven out of business, they have even more power.
We saw it with retail, we saw it with banking, we will see it with housing.
This is only part of the story. It would only ban large investment corporations (such as Blackstone) from buying single family homes.
Commie nonsense, and not at all surprising considering Trump is an authoritarian central planning NYC progressive to his core.
The government will do literally anything except stop running the money printer.