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private equity is no different than any other buyer in a diverse market of buyers here. it sounds bad but they are just bidding like any other buyer

epistasis 2y ago
This is of course true, and the extreme aversion to private equity buying houses versus any other investor such as a person buying a second house to rent out, has puzzled me. Those small time landlords have been the worst landlords I have ever had. Give me a large corporate landlord which knows that laws exist and at least tries to follow them over the greedy, ignorant, and desperate small-time landlord any day.
- dbspin 2y ago
  As someone who has lived in both, I can't agree. The small time landlords have differed between incredibly kind and deeply unreasonable, but they've all charged under market and responded to issues with their properties in a timely way. I've hit brick walls even attempting to contact owners / get building management to respond with institutional ownership. Both your experience and mine however are anecdotal and while persuasive to us individually, don't evidence the issue one way or another.
rafram 2y ago
This story (as I said in a reply to the parent comment) is bunk, but institutional buyers do have a significant advantage over regular people in the form of access to cash. You have to get a real estate agent, find a bank that will lend to you, get your financial info together, probably have an in-person meeting, hope you get approved for a mortgage, and finally close the sale. Some junior trader at Blackstone can just wire the full cash price of the home and have the paperwork signed the same day.
dbspin 2y ago
They're not constrained by income as an ordinary purchaser would be. So they're not at all like an ordinary buyer. Further, if private equity buys to rent at scale they can fundamentally alter the availability and pricing of housing in a market. These firms effectively collude to raise home prices. Investors and Housing Affordability FEDERAL RESERVE BANK OF ST. LOUIS (2020) https://s3.amazonaws.com/real.stlouisfed.org/wp/2020/2020-047.pdf https://s3.amazonaws.com/real.stlouisfed.org/wp/2020/2020-04... Relationship between rents in NYC and ownership concentration https://www.cesifo.org/DocDL/cesifo1_wp8864.pdf https://www.cesifo.org/DocDL/cesifo1_wp8864.pdf Consolidation of rental market bt private investment firms https://journals.sagepub.com/doi/10.1177/0308518X221135612 https://journals.sagepub.com/doi/10.1177/0308518X221135612 The Impact of Institutional Investors on Homeownership and Neighborhood Access https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4554831 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4554831 Algorithmic collusion in the housing market https://apnews.com/article/algorithm-corporate-rent-housing-crisis-lawsuit-0849c1cb50d8a65d36dab5c84088ff53 https://apnews.com/article/algorithm-corporate-rent-housing-...

epistasis 2y ago

This is of course true, and the extreme aversion to private equity buying houses versus any other investor such as a person buying a second house to rent out, has puzzled me. Those small time landlords have been the worst landlords I have ever had. Give me a large corporate landlord which knows that laws exist and at least tries to follow them over the greedy, ignorant, and desperate small-time landlord any day.

dbspin 2y ago
As someone who has lived in both, I can't agree. The small time landlords have differed between incredibly kind and deeply unreasonable, but they've all charged under market and responded to issues with their properties in a timely way. I've hit brick walls even attempting to contact owners / get building management to respond with institutional ownership. Both your experience and mine however are anecdotal and while persuasive to us individually, don't evidence the issue one way or another.

rafram 2y ago

This story (as I said in a reply to the parent comment) is bunk, but institutional buyers do have a significant advantage over regular people in the form of access to cash. You have to get a real estate agent, find a bank that will lend to you, get your financial info together, probably have an in-person meeting, hope you get approved for a mortgage, and finally close the sale. Some junior trader at Blackstone can just wire the full cash price of the home and have the paperwork signed the same day.

dbspin 2y ago

They're not constrained by income as an ordinary purchaser would be. So they're not at all like an ordinary buyer. Further, if private equity buys to rent at scale they can fundamentally alter the availability and pricing of housing in a market. These firms effectively collude to raise home prices. Investors and Housing Affordability FEDERAL RESERVE BANK OF ST. LOUIS (2020) https://s3.amazonaws.com/real.stlouisfed.org/wp/2020/2020-047.pdf https://s3.amazonaws.com/real.stlouisfed.org/wp/2020/2020-04... Relationship between rents in NYC and ownership concentration https://www.cesifo.org/DocDL/cesifo1_wp8864.pdf https://www.cesifo.org/DocDL/cesifo1_wp8864.pdf Consolidation of rental market bt private investment firms https://journals.sagepub.com/doi/10.1177/0308518X221135612 https://journals.sagepub.com/doi/10.1177/0308518X221135612 The Impact of Institutional Investors on Homeownership and Neighborhood Access https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4554831 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4554831 Algorithmic collusion in the housing market https://apnews.com/article/algorithm-corporate-rent-housing-crisis-lawsuit-0849c1cb50d8a65d36dab5c84088ff53 https://apnews.com/article/algorithm-corporate-rent-housing-...