The Coming Nightmare of Wall Street-Controlled Rental Markets

[FaC]

Small campfire just getting started but there are already pearls to be found...

http://www.democraticunderground.com/10024807029

Original was just a  C&P with no enlightened comments:

xchrom (101,184 posts)   Fri Apr 11, 2014, 06:37 AM

The Coming Nightmare of Wall Street-Controlled Rental Markets
  
http://www.alternet.org/hard-times-usa/game-homes-coming-nightmare-wall-street-controlled-rental-markets

In a 2011 report, Morgan Stanley analysts proclaimed that America was experiencing a transition from an ownership society to a “ rentership society.” “The combination of falling home prices, limited mortgage credit, continued liquidations and better rental options is fundamentally changing the way Americans live,” says the report, concluding, “We believe this change is only beginning.” For Wall Street firms, the Morgan Stanley report appears to have become a self-fulfilling prophecy: Seeing a profitable opening in the wake of the foreclosure crisis, investment groups have worked diligently to bring a “rentership society” into being. During the past two years, investors have bought approximately 200,000 single-family homes, mostly foreclosures, in urban areas nationwide, with plans to convert them into rental properties. In Atlanta, one such investment group purchased 1,400 homes on a single day in April of last year.

WinkyDink (39,983 posts)

1. The 1% wants to own the Earth. THAT is their end-game.

Whatever...

djean111 (2,849 posts)

2. Blackstone owns about 20% of my development, I think.
 
Problems with massive numbers of rental homes - they are usually not even kept in great condition, but that is just the start of the problem. People in rentals are not remodeling, not upgrading appliances, not buying a lot of new furniture, not supporting the businesses that depend on homeowners. They are not landscaping, they are probably not planting gardens. Not adding security systems or swimming pools. Everything is minimal, and done as cheaply as possible due to ROI considerations. When huge corporations like Blackstone can negotiate property taxes down, then less money goes to schools and infrastructure.

Blackstone is coming, Blackstone is coming - run for the hills!!!

KurtNYC (13,509 posts)

5. It is MUCH easier for someone with iffy cedit to rent than buy
 
After the implosion of 2007, many banks raised the amount required for a down payment to 20%. In the foreclosure market cash is king. Banks that own these foreclosed mortgages want to sell them "as is" for cash -- so for those, figure the buyer would need 100% down payment.

Property taxes locally are ridiculously high and still rising. 4% officially but most homeowners are over-assessed because the assessors boosted appraisal values when the market was up but will not lower them now. The county in live in loses 1% of it's population every year so by 2040 we will have 25% fewer people here but the city and county go right on spending (they just expanded the courthouse in a county that is steadily shrinking (?)). About 25% fewer families to share the outrageous tax burden.

A family paying for a home here is effectively paying about 5% of the market value of the house every year in property taxes. That means that in 20 years they have paid out the ENTIRE value of the house in taxes. A 30-year loan on a $100K house means the family will pay $150,000 in property taxes before they get the deed (and paying the loan will cost another $180K or so) -- $330,000 for a $100,000 house. And if they do no maintenance for 30 years the house will be in tear down condition by the time they own it. Meanwhile the assessor and property tax system does not allow for depreciation.

"Homeownership" is a lie.

A neighbor of mine has walked away from 3 different apartment owing each landlord back rent but she still finds new apartments. Her current rent is about 60% of her take home so she is likely headed for another eviction at some point. I think landlords just take their chances on whoever seems best able to pay for a while. Banks won't do that (anymore).

SO many comments - where should I start....

Property taxes locally are ridiculously high and still rising.

Gee, I wonder why this is so? Could it possibly be related to out of control government spending?

4% officially but most homeowners are over-assessed because the assessors boosted appraisal values when the market was up but will not lower them now.

Our overlords would never behave this way - he must be confused and needs to be re-educated.

The county in live in loses 1% of it's population every year so by 2040 we will have 25% fewer people here but the city and county go right on spending (they just expanded the courthouse in a county that is steadily shrinking (?)).

I thought our government always made the best possible decisions taking in all relevant factors

About 25% fewer families to share the outrageous tax burden.

A family paying for a home here is effectively paying about 5% of the market value of the house every year in property taxes. That means that in 20 years they have paid out the ENTIRE value of the house in taxes.

Hang on just a second. I thought that paying taxes was our patriotic duty and we should smile as we are being fleeced.

sendero (26,192 posts)

4. There is a reason ....
 
.... that owning and managing rental property has largely been a "mom and pop" business. It is very hands-on and not easily farmed out to minions. The process of finding properties, paying the right amount for them, rehabilitating them and keeping them in great condition (essential for getting the rental occupancy and rates required to make this viable) and most importantly qualifying tenants (also essential, one bad tenant can send a year's profit down the drain) isn't done well by hired "property managers" who have no real vested interest in the outcome.

To summarize, I don't expect this to end as well for these hedge funds as they think it is going to,

I wonder where the majority of bad tenants come from?

[Karin]

Wow, KurtNYC sounds positively Tea Party-ish. 

I would remind him though, that renters also share in the property taxes.  If the renters vote to approve a property tax increase, thinking they're sticking it to someone else, they can expect a letter raising the rent. 

And the other DUmmie was right, one bad tenant can wipe out a year's profit.  This is due to liberal policies, which give the property owner almost no rights.  To oust a squatter requires lawyers, legal fees, and lots and lots of time and money. 

[JohnnyReb]

In my younger days, I worked a swing shift and when on second/third and week days off I worked for a rental company. Oh the messes democrat voters make. That right there kept me from ever owning to rent anything to people. There were a few who were good trouble free renters but not a big enough percentage for me to dapple in that market.

[BlueStateSaint]

A neighbor of ours, three doors down, went on a business trip.  His wife and him presented a paper at a work conference in Orlando, and they took the two kids along (one hers, one his), as they're hitting Disney afterwards.  We're taking care of the cats.  Let's just say that their housecleaning standards aren't up to those of ours . . . The one social cat just about trips my daughter and I when we've been in there.  But, the house was so bad that I brought my daughter home early and then went back over there to finish with the cats.  It's bad.  It could easily be worse, but it's pretty bad.  Not sure if they own or rent, though.

[Carl]

Hey Kurt...wait until the states have to pick up a share of the "free money" from the expanded Medicaid.
Most of that gets passed on down to the county level to be funded by guess what??

Stupid ass.

[USA4ME]

The primitives really need to drop pretending they understand anything about the real estate/financial markets. I've read more knowledgable comments from kids playing with Lincoln Logs.

.

[98ZJUSMC]

KurtNYC (13,509 posts)

5. It is MUCH easier for someone with iffy cedit to rent than buy
 
After the implosion of 2007, many banks raised the amount required for a down payment to 20%. In the foreclosure market cash is king. Banks that own these foreclosed mortgages want to sell them "as is" for cash -- so for those, figure the buyer would need 100% down payment.

Property taxes locally are ridiculously high and still rising. 4% officially but most homeowners are over-assessed because the assessors boosted appraisal values when the market was up but will not lower them now. The county in live in loses 1% of it's population every year so by 2040 we will have 25% fewer people here but the city and county go right on spending (they just expanded the courthouse in a county that is steadily shrinking (?)). About 25% fewer families to share the outrageous tax burden.

A family paying for a home here is effectively paying about 5% of the market value of the house every year in property taxes. That means that in 20 years they have paid out the ENTIRE value of the house in taxes. A 30-year loan on a $100K house means the family will pay $150,000 in property taxes before they get the deed (and paying the loan will cost another $180K or so) -- $330,000 for a $100,000 house. And if they do no maintenance for 30 years the house will be in tear down condition by the time they own it. Meanwhile the assessor and property tax system does not allow for depreciation.

"Homeownership" is a lie.

A neighbor of mine has walked away from 3 different apartment owing each landlord back rent but she still finds new apartments. Her current rent is about 60% of her take home so she is likely headed for another eviction at some point. I think landlords just take their chances on whoever seems best able to pay for a while. Banks won't do that (anymore).

Well, you can just



baby.  Everything to do with the housing market bubble was created and exacerbated by YOU.  Wall Street packaging derivatives?  You.  Ridiculous price inflation cause every Tom, Dick and Juan the Gardener making <$40,000.00/yr are/were getting notes on $200,000.00 PLUS McMansions with almost no money down.  Why?  

Because, among other (CRA and MightyRapists' steroid injection) things, race baiting rabble-rousers like your halfrican retard were shaking down banks to extort mortgages for people who had no friggin' hope of retiring the note.

Let's not get started on the DNC® Money Laundering operation called Freddie and Fannie......

You idiots make me sick.

Property taxes locally are ridiculously high and still rising.

W-w-wait, I was just told by one of your fellow finger painters that we were overly paranoid about taxes, you know, "all for one and one for all" and all that dumb bullshit?

[98ZJUSMC]

The primitives really need to drop pretending they understand anything about the real estate/financial markets. I've read more knowledgable comments from kids playing with Lincoln Logs.

.

 

[Chris_]

After the implosion of 2007, many banks raised the amount required for a down payment to 20%.

They didn't "raise" anything.  They went back to the old rules of lending that worked, not some free money grab pushed by Democrat legislators in DC.

[98ZJUSMC]

Hey Kurt...wait until the states have to pick up a share of the "free money" from the expanded Medicaid.
Most of that gets passed on down to the county level to be funded by guess what??

Stupid ass.

W-what?  You mean......?

 

...friggin' mongoloids.

[Dori]

Property taxes locally are ridiculously high and still rising.

So how do you think your schools, police, firemen, and city/county services are paid?

Does your state have an income tax?  Sales tax?

[I_B_Perky]

They didn't "raise" anything.  They went back to the old rules of lending that worked, not some free money grab pushed by Democrat legislators in DC.

What you said Chris. Used to be 20 percent was the minimum. Banks liked you to have 25-30 percent if you wanted a good rate.

So how do you think your schools, police, firemen, and city/county services are paid?

Does your state have an income tax?  Sales tax?

Dori, the more pressing question is why do the dummies hate school teachers, kids, police and firemen. How many time have I heard the dummies scream about how conservatives shouldn't have police/fire protection, drive on roads, etc, because we are against taxes. Never mind it is federal taxes we complain about because truth doesn't get in the dummies way. How many times have we heard we hate the chiiiildren!!!!