Where are all the people coming from?

[amassi]

Anybody seen the property management side of this real estate investment strategy?
Most rental properties I've been through were minimally maintained. Will neighborhoods with owner-occupied homes be able to withstand that?

They look like caca, get sold for a loss(write off) dressed up and rerented. It seriously feels like a ponzi scheme or a way to launder money at this point.

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[amassi]

Agreed. You would think there would be a vacuum somewhere. If all of the Californians, Washingtonians, etc. are moving out of state, and their previous house/apartment are being immediately filled, where are those folks moving in from? There doesn't seem to be any vacancy anywhere.

Apartments to homes. Homes to better homes
Many employers here (California) are ok with wfh(work from home) so people no longer need to live in terrible cities and arriving to the burbs and the country. My area still has an inventory issue where new homes are bought before their built and were having an influx of subdivisions being built that are all rentals owned by blackstone and jen partners.

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[wingmaster]

I live in CA and it seems every month I know someone who leaves and buys a house somewhere else

 

[Dos Perros]

Increase pay to outpace inflation and the jobs will fill. I've been looking around for a new field as I'm often bored/unchallenged at work and the jobs being posted in my field are not commensurate with the training and experience required to do them. I interviewed and negotiated with one of them and got close to what I'm making and felt terrible when the senior hr rep said there's noone in the dept making that kind of money. So they become a training ground for new grads willing to work 2 Years for the experience then we hire them for much more money, more time off and flexibility.

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Preaching to the choir.

My employer proactively bumped folks up independent of the annual review process; they're trying to stop the bleeding.

The point remains tho, if one employer bumps pay and poaches from another employer, that employer will still have to replace them. It doesn't solve the problem of too much work, not enough people.

 

[displacedtexan]

I read they aren't turning around and selling them. They are renting them out. Yes, they get filled either way, but this then makes one less house on the market for a family to purchase.

But if a family moves in, it's one less family looking for a house...

 

[loganwayne]

Some really good answers here. But also know how much inventory is bought up by investors or investor companies. There are some companies run by the likes of money that Walmart has that have many many investors that all own a small % of the pie. They buy hundreds and hundreds of houses in different cities, thus making them owners of thousands and thousands of houses all over, and they turn around and rent them out. Where I live in the south, over 50% of the buying in Q1 was from cash buyers. So when you hear of big entities buying farm land, they are also buying up houses to then rent out. I just learned of a development that will be an entire 500 house neighborhood and every house will be a rental. A rental neighborhood if you will. Crazy.

dont know where your at in the south but we have been talking with a company that is based up north that want to do that here and have us build them. and these arent low income houses. the prjected rental is 2250-4500 per month

 

[trazerr]

But if a family moves in, it's one less family looking for a house...

True and I should have added this is location dependent. People are leaving cities and moving out into the country. For example, PDX is losing more people than they are gaining now. This was as of a month or so ago. However, the suburbs and country living outside of PDX is still hot. Plus, about half of the home applications are Californians here per my relator. Makes sense as CA is losing more people than they are adding. Add in a ton of millennials are now at the age to buy and new housing builds are still low and it makes a perfect storm.

 

[TreeWalking]

Anybody seen the property management side of this real estate investment strategy?
Most rental properties I've been through were minimally maintained. Will neighborhoods with owner-occupied homes be able to withstand that?

Short answer, no.

An investment group will not freshen up a property as long as stays rented. If the maintenance schedule for the region says paint every 15 years then maybe they will paint every 15 years. Planting a tree is a poor investment when then have to water the plant so yards will evolve to be minimal maintenance as well. Pruning existing trees will not be done so the cracked limb hanging down will likely stay that way for a long, long time. Used to be that in an established neighborhood that was built two decades ago that things would look rather nice except for the owner or two where the handier person died and the survivor is older and maybe on a tight budget so things start to look a bit rough. Likely will not result in home values falling unless you are book-ended by two of the houses looking rough.

 

[Dos Perros]

HOA's are now looking more tolerable, eh?

 

[amassi]

But if a family moves in, it's one less family looking for a house...

Unfortunately many renters will never qualify for a mortgage due to bankruptcy, felony et el. Some of those renters and forever renters.

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[quarterhorse]

A significant portion of houses built and purchased currently are for second second homes and not a primary dwelling. This has always happened, but is much more common now.

Houses that used to be purchased by investors and rented by the month as a primary dwelling are now being rented as nightly vacation properties. Managing nightly rentals through something like AirBnB is much easier than it used to be. It doesn't take a high occupancy rate to equal what could have been gotten by the month, you get paid in advance, and you can skip the tenant and their issues.

 

[Mtnmilsurp]

Only boomers did it on one union income with maybe a high-school education.

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Those boomers were buying 1200 sqft 3Bed/1Bath stucko shotgun houses with no garage. You could probably still buy that house on a union job with a high school education in Dayton Ohio but who would want to live there? We're not just paying a lot more these days, we're expecting and getting a lot more.

 

[amassi]

Those boomers were buying 1200 sqft 3Bed/1Bath stucko shotgun houses with no garage. You could probably still buy that house on a union job with a high school education in Dayton Ohio but who would want to live there? We're not just paying a lot more these days, we're expecting and getting a lot more.

Nope first time homebuyers aren't expecting more, they're making much much less and getting priced out by an artificially high market driven by investment.

Those boomers were buying those houses in sf, long Beach, san Diego, New York and Boston. They're now 600sf duplexes renting for $5000 a month or for sale for 1.5M.

Owning property is mostly an accident of birth- I came of home buying age at the end of the last crash. Inventory was high and prices in the toilet I had to compete with a ton of cash buyers picking up all the short sales but the homes that made the market were right up my alley- those homes, those first time homes are gone.

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[RS_Non-Res]

HOA's are now looking more tolerable, eh?

I hate HOA's on principle. But yea. My HOA got resurrected after 20 years and is now considering enforcing short-term rental rules that were in the original documents. Gotta somehow have HOA membership require ownership and occupancy or in-person attendance at meetings. But gee, property rights are pretty important, so I don't like treading on them casually.

 

[100percent]

Well you see, when a mommy and daddy love each other very much…

 

[roadrunner]

Millennials surpassed boomers in 2019. Boomers were the largest generation but there are more millennials on earth today than there are boomers.

I meant that as its the largest generation to exist, as in living, I could have worded that better.

That's because boomers are starting to go by the wayside, so to speak...

Millennials also got short sheeted on a few years of early and valuable work experience when boomers put a stay on retirement when the 2008 crash happened. Less boomers retiring caused more gen xer's to be paused in their own career advancement reducing vacancies in the labor market for gen y's to occupy them.

 

[BRTreedogs]

My understanding when I talked with LA folks is alot live in large extended families until well into there 30s because they need to save 2-300k down payment to be able to afford the mortgage.

 

[def90]

The population of the US has grown something around 50,000,000 people since 2000. They all have to live somewhere. If evenly distributed it wouldn't amount to much but the reality is that areas of the country are losing people and others have been gaining. Rural middle America South Dakota, Kansas, Nebraska and so on have stayed relatively the same or lost people while other places have exploded. If you live in an area that has been gaining this whole time such as Denver Co then you are going to notice it. Colorado has gained 1.5 million people in the last 20 years with the vast majority of them moving to the front range area along with an exodus of people that lived in rural communities moving to the city.

You also end up with the problem here in Colorado of the 2nd and 3rd home owners tbat buy homes in rural mountain towns driving uo prices and taking inventory away from the local population.

In the end, there are a ton of people out there as well as real estate is a place for people to dump money that is relatively safe. You can get a home loan for almost nothing and keep your millions in the stock market.. a win win for them.

 

[Rob5589]

Most that I know, including my daughters, are literally panicked over the fact that they may never be able to buy a home (CA). The constant talk about inventory shortages, corps buying up homes, mortgage rates climbing, add to that panic and desperation to own a home.

 

[Newtosavage]

South border

So are you suggesting that the same people that are living "on welfare" and "not paying taxes" are buying up $600k homes?