4 ms·
This is really, really old news, and the headline is, if not exaggerated, entirely premature. Yes, some companies have been buying single family houses by the
by 7Figures2Commas 13y ago
This is really, really old news, and the headline is, if not exaggerated, entirely premature.
Yes, some companies have been buying single family houses by the truckload and turning them into rentals, but whether the model can be successful on such a wide scale remains to be seen. There are a number of major challenges, and the treatment of the publicly-traded companies in this space makes it clear that investors are well aware of them.
One of the companies mentioned in the article, American Homes 4 Rent, is publicly-traded[1] and raised far less in its IPO than it had intended in its original prospectus[2]. Similar companies, Silver Bay Realty Trust and American Residential Properties, are also publicly-traded[3][4] and currently trade well below their IPO prices.
Another company mentioned in the article, Colony Capital LLC, operates its rental venture through Colony American Homes, which pulled its IPO earlier this year[5].
Turning single family homes into rentals on such a large scale may prove to be a wildly successful business, and some of the issues raised by this article, such as the impact on the housing market, are worth discussing, but it's a shame that the article sports a baitlink title and gives the impression that there's no risk to the investors playing in this space.
[1] http://www.google.com/finance?q=amh http://www.google.com/finance?q=amh
[2] http://www.bloomberg.com/news/2013-07-31/american-homes-4-rent-raises-705-9-million-in-u-s-ipo.html http://www.bloomberg.com/news/2013-07-31/american-homes-4-re...
[3] http://www.google.com/finance?q=sby http://www.google.com/finance?q=sby
[4] http://www.google.com/finance?q=arpi http://www.google.com/finance?q=arpi
[5] http://www.reuters.com/article/2013/06/05/us-colonyamericanhomes-ipo-idUSBRE95411O20130605 http://www.reuters.com/article/2013/06/05/us-colonyamericanh...