5 ms·

Thing is, you don't need a ton of "income" to buy real estate if you're e.g. Black Rock, and money is ridiculously cheap right now. And Black Rock knows inflati

by m0zg 5y ago

Thing is, you don't need a ton of "income" to buy real estate if you're e.g. Black Rock, and money is ridiculously cheap right now. And Black Rock knows inflation is coming so they're looking forward to paying an inflation adjusted dime on each borrowed dollar. This is the "Russian Oligarch" strategy through which all of them have gotten rich in the 90s. Borrow eye watering amounts of money, buy assets, pay back with currency inflated into nearly nothing a few years later. Voila, you now have an insane amount of assets for effectively free. I bet it's also not just Black Rock that's doing this, and other 0.01%-ers with access to cheap, effectively unlimited, QE funds are pulling similar moves.

jodrellblank 5y ago
UK bank Lloyds announced plans to buy 50,000 houses and become one of the nation’s biggest landlords by 2030 - https://www.bbc.co.uk/news/articles/cjkdyy9xgn3o https://www.bbc.co.uk/news/articles/cjkdyy9xgn3o
- dazc 5y ago
  I'd much rather rent a house from an established financial institution than an amateur landlord. The institution will have a realistic expectation of return and will usually carry-out it's responsibilities in a professional manner and, if not, can be held accountable in the courts. I also doubt the CEO of Lloyds will popping round on Saturday mornings to meddle with something or other?
  - m0zg 5y ago
    They have no plans to own this asset in perpetuity. They'll then sell it back to you for 10x the price in inflated currency. Banks didn't even want houses they already owned during 2008 housing crisis - during more normal times they are, strictly speaking, a depreciating asset that is a pain in the ass to maintain, so a lot of foreclosed homes just rotted empty. But we are not living in "normal times" at this point. We're in uncharted waters.
  - bombcar 5y ago
    There’s a reason established landlord companies want nothing to do with single family homes. They’d much rather have large apartment buildings where then can more easily control and predict costs.

by m0zg 5y ago

jodrellblank 5y ago

UK bank Lloyds announced plans to buy 50,000 houses and become one of the nation’s biggest landlords by 2030 - https://www.bbc.co.uk/news/articles/cjkdyy9xgn3o https://www.bbc.co.uk/news/articles/cjkdyy9xgn3o

dazc 5y ago
I'd much rather rent a house from an established financial institution than an amateur landlord. The institution will have a realistic expectation of return and will usually carry-out it's responsibilities in a professional manner and, if not, can be held accountable in the courts. I also doubt the CEO of Lloyds will popping round on Saturday mornings to meddle with something or other?
- m0zg 5y ago
  They have no plans to own this asset in perpetuity. They'll then sell it back to you for 10x the price in inflated currency. Banks didn't even want houses they already owned during 2008 housing crisis - during more normal times they are, strictly speaking, a depreciating asset that is a pain in the ass to maintain, so a lot of foreclosed homes just rotted empty. But we are not living in "normal times" at this point. We're in uncharted waters.
- bombcar 5y ago
  There’s a reason established landlord companies want nothing to do with single family homes. They’d much rather have large apartment buildings where then can more easily control and predict costs.