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High demand for affordable housing and a limited supply meant working-class renters had few options, Gajavelli told investors. “Unfortunately, they don’t have g

High demand for affordable housing and a limited supply meant working-class renters had few options, Gajavelli told investors. “Unfortunately, they don’t have good credit. They don’t have down payments to buy the home,” he said in a webinar for prospective investors last year. “They live in apartments forever.” How many tenants ended up on the street because of these “investors”?

floren 3y ago
> By summer 2022, the pool water had turned a sickly green. High piles of trash littered the parking lot. Tenants complained to city officials about rats, mold, illegal evictions and the failure of management to properly maintain the buildings. Too many. Note that this property was purchased in Dec 2021, so it only took 6 months for them to turn it into a slum.
joshlemer 3y ago
When investors buy property to rent out, they are diverting housing away from homeowners, to make them available to renters. By more investors entering the real estate market, they drive down the price of rent through competition and higher vacancy rate. So, yeah I'll go ahead and answer your rhetorical: literally no tenants ever end up on the street because too many investors are competing in the marketplace to provide housing for them.
- floren 3y ago
  Drive down the rent? The article is all about how these parasites buy the properties specifically so they can raise the rents, you mewling bootlicker.
  - joshlemer 3y ago
    Yes, drive down rent. Of course, each producer in a market wants to get as much money for their product/service as they can get, just like every consumer wants to pay the cheapest price. That's why the role of competition amongst landlords is so important, so that their profit is driven to zero and they have no power to raise prices. People entering the real estate market to become landlords are that competition. Also, from the article it sounds like a lot of these would-be landlords/investors are having a tough go of things, and aren't in fact able to turn a profit which is why they have to foreclose. Your characterization of landlords as parasitic leaches taking excessive profit without doing any work or risking anything isn't super consistent with the fact that many landlords don't beat the market, or even take significant losses.
    - MereInterest 3y ago
      That assumes the landlords are competing with each other. Currently, an increasing number of landlords are pricing based on each other’s private pricing data [0]. To me, I can only describe this as price-fixing-as-a-service. [0] https://arstechnica.com/tech-policy/2022/10/company-that-makes-rent-setting-software-for-landlords-sued-for-collusion/ https://arstechnica.com/tech-policy/2022/10/company-that-mak...
- lxm 3y ago
  > When investors buy property to rent out, they are diverting housing away from homeowners, to make them available to renters. I think you're describing single-family, but bulk of those deals are done in multi-family space, where a building is either an apartment complex (with units intended for rent) or a condo (with units that are owned). So most real estate investors are buying from another investor (or a builder). While there are some developers that do condo conversions (apartments -> condo), apartment conversions are rarely a thing, probably due to complexity of the deal.

floren 3y ago

> By summer 2022, the pool water had turned a sickly green. High piles of trash littered the parking lot. Tenants complained to city officials about rats, mold, illegal evictions and the failure of management to properly maintain the buildings. Too many. Note that this property was purchased in Dec 2021, so it only took 6 months for them to turn it into a slum.

joshlemer 3y ago

When investors buy property to rent out, they are diverting housing away from homeowners, to make them available to renters. By more investors entering the real estate market, they drive down the price of rent through competition and higher vacancy rate. So, yeah I'll go ahead and answer your rhetorical: literally no tenants ever end up on the street because too many investors are competing in the marketplace to provide housing for them.

floren 3y ago
Drive down the rent? The article is all about how these parasites buy the properties specifically so they can raise the rents, you mewling bootlicker.
- joshlemer 3y ago
  Yes, drive down rent. Of course, each producer in a market wants to get as much money for their product/service as they can get, just like every consumer wants to pay the cheapest price. That's why the role of competition amongst landlords is so important, so that their profit is driven to zero and they have no power to raise prices. People entering the real estate market to become landlords are that competition. Also, from the article it sounds like a lot of these would-be landlords/investors are having a tough go of things, and aren't in fact able to turn a profit which is why they have to foreclose. Your characterization of landlords as parasitic leaches taking excessive profit without doing any work or risking anything isn't super consistent with the fact that many landlords don't beat the market, or even take significant losses.
  - MereInterest 3y ago
    That assumes the landlords are competing with each other. Currently, an increasing number of landlords are pricing based on each other’s private pricing data [0]. To me, I can only describe this as price-fixing-as-a-service. [0] https://arstechnica.com/tech-policy/2022/10/company-that-makes-rent-setting-software-for-landlords-sued-for-collusion/ https://arstechnica.com/tech-policy/2022/10/company-that-mak...
lxm 3y ago
> When investors buy property to rent out, they are diverting housing away from homeowners, to make them available to renters. I think you're describing single-family, but bulk of those deals are done in multi-family space, where a building is either an apartment complex (with units intended for rent) or a condo (with units that are owned). So most real estate investors are buying from another investor (or a builder). While there are some developers that do condo conversions (apartments -> condo), apartment conversions are rarely a thing, probably due to complexity of the deal.