Many of the world’s largest investment firms have launched new funds over the past couple of years aimed at acquiring or building single-family homes to use as rentals. This comes as no surprise considering that the increased cost of buying a home has forced many Americans into being tenants instead of homeowners. Arrived, a young real estate company backed by Amazon.com Inc. founder Jeff Bezos, has just announced its entry into the single-family rental fund space. Arrived currently operates a f
It’s not just billionaires buying up all the housing, it’s anyone who can afford the investment. Real estate makes interest in value year over year with minimal upkeep costs AND it generates revenue every year from rentals. If you manage to secure permits to convert it to multifamily you instantly split your house into two parts with nearly the same individual value, almost doubling the value on the spot at the cost of adding a couple of walls and doors and maybe a kitchen.
Real Estate as a source of investment and revenue goes contrary to the idea of accessible housing for everybody. If it’s a lucrative investment with greater low risk returns than any other low risk investment type, why would anyone take more risk?
My landlord is 45 and owns 4 properties with a total of about a dozen units. He bought a small business with the income and retired from his job at a defense contractor. His total wealth is under 10m and he started with probably little more than 50k ~25 years ago. Low interest loans have done wonderfully for anyone turning a small amount of cash into a big amount, assuming you bought in the right place with the intent to rent out to middle class workers.
Not to mention REITs, or real estate investment trusts. Entire corporations dedicated solely to buying up property for share holders.
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Got a buddy on that exact same path.
It’s a bunch of shit that he’s not taxed to below fiscal feasibility for his multiple single family homes.
Make it so 50%+ of rent becomes equity and instantly housing becomes accessible to all. Can’t rent without giving ownership to your tenants. Banks would get the lion’s share of the income (it’s their money anyway if you have a mortgage…) and owner occupied properties are still feasible.
No one’s “value” would disappear either.