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US will ban Wall Street investors from buying single-family homes

reuters.com

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Re: US will ban Wall Street investors from buying single-family homes

#551

Post by lufenialif2 »

dheera wrote: post #472
kiba wrote: post #334

Earlier quoted context omitted.

Landlord, or property management, is a job, same as any other job you might have. The problem is not owning multiple properties, but not paying enough taxes on land. Otherwise, landlords benefit from the free lunch that comes with economic growth and real estate price appreciation, which is true for every homeowners in this country. IF you want affordability? Tax land. Doesn't matter who owns them. Your grandma or wa…

No. If you want affordability, make the government efficient and tax people LESS . The government steals half of my money, half of my landlord's money, and I have to pay my landlord’s income and property tax in addition to my own income tax. This is why I still cannot afford a home even though I work in a senior role in AI. After paying all those damn taxes and everyone else’s taxes there is almost nothing left.

I’d imagine it’s less taxes and more you want to buy a nice house in the Bay Area where a lot of people are high earners and would be driving up prices on the low supply.

Re: US will ban Wall Street investors from buying single-family homes

#552

Post by tptacek »

presentation wrote: post #540
tootie wrote: post #239

Earlier quoted context omitted.

Yup. Building wealth through home ownership directly implies homes becoming unaffordable for new buyers.

I agree philosophically though there is a lot that can be done short of upending the entire American wealth structure like removing barriers to housing construction (to dramatically increase supply) as well as subsidizing first time buyers eg with preferential mortgage rates and tax write offs.

* Dramatically increasing supply will dramatically reduce home prices. That's the point.

* Subsidizing first-time buyers will increase home prices. That's the opposite of the point.

Re: US will ban Wall Street investors from buying single-family homes

#553

Post by jimt1234 »

roadside_picnic wrote: post #48

The key word here is "Wall Street". And this statement is playing off a popular misconception around corporate investors buying up American houses. There has been a bit of a panic around "Investors buying up all the property!!!" With people often citing Black Rock and Blackstone as the main culprits. But most of the "investors" buying up property are individuals purchasing investment properties. Here's an article on…

This doesn't match what's been going on in my area. A local newspaper reported about a year ago that Black Rock owns 40% of the rental units.

Re: US will ban Wall Street investors from buying single-family homes

#554

Post by SecondHandTofu »

lewdev wrote: post #201
rgmerk wrote: post #165

It will make very little difference in the end. Australia's land tax system makes it effectively impossible for large corporations to own large chunks of residential property, but our real estate is amongst the world's most expensive and landlords are still awful - it's just that the landlords are hundreds of thousands of dentists and, yes, software engineers rather than corporate entities. If you want housing to be…

> It will make very little difference in the end. I feel like there will be a difference between a handful of large corporations owning a majority of properties vs thousands of dentists and software engineers. Are you saying that all of these property owners are also soulless profit-optimizers? I remember watching some video of tenants being priced out of their rental apartments so when they tried to contact the prop…

It's the opposite in the UK. Most landlords are individuals, own one or maybe a couple of properties.

It's awful, rogue landlords who do everything they can to not do repairs or improvements and when they do it often comes after a long time. Often as they have underestimated all the expenses they're liable for and find that the profit is not very much.

Give me a company that owns a whole block every day, they've modelled the risk better, have economies of scale, and you have more recourse against them.

Re: US will ban Wall Street investors from buying single-family homes

#555

Post by bs7280 »

WalterBright wrote: post #292
bs7280 wrote: post #260

Earlier quoted context omitted.

I propose two changes to (try) and broadly solve this: - Additional property tax if you do not live in your home fulltime. This includes vacation homes. - First time, US Citizen, non-corporate homebuyers can get a loan at the federal interest rate. If I were to try and buy the condo I rent, due to interest rates, taxes, and HOA's I would be paying $1000 more per month. At the end of my mortgage I would given the enti…

> Rich investors and companies effectively get to buy homes at a discount vs average joes. Suppose you had $100,000 in cash, and buy a house for $100,000. You'll not be paying 5% interest on a mortgage. But if you did not buy the house, you would be investing that $100,000 for a 5% return. So, you're either paying 5% on the mortgage, or foregoing 5% return for investing that money. The rich person is not getting a di…

This is a good point, and I was curious to see exact numbers on the invest vs be a landlord opportunity cost.

The rich person gets to rent the house, while the "newly weds" are living in it. And most importantly - the house itself will appreciate in value at a rate near 5%

Assuming they both buy a $500k house w/ a 20% down payment and a 5% loan. Realistically the young couple would get a worse rate but lets say they both get 5%. Monthly payment is $2,522.29 w/ taxes and insurance lets call it $3000 a month.

The newly weds are just eating that entire cost every month for 30 years, whereas the Rich landlord rents it out. After a quick and dirty Zillow search lets assume $3500 a month rent to start, so he's making $500 a month profit on an asset thats already increasing in value 5% ish per year.

So, with these assumptions: - Home cost increases 2% a year - Rental price increases 3% a year - Home value increases 5% a year

Total rental profit is $537k Final home value is $1.56 M Total Loan cost: $873k

Bringing the landlords return on 100k to be $1.224M in profit over 30 years (Final sell price - total loan cost + rental profit assuming they stuff it under a mattress). Whereas $100k at a 5% yearly return will be ~$430k

disclaimer: Im not the best with Excel and ive never actually bought property so im sure there are flaws in my math.

Re: US will ban Wall Street investors from buying single-family homes

#556

Post by john-h-k »

EugeneG wrote: post #358
observationist wrote: post #283

Earlier quoted context omitted.

It's not that simple - the problem is that those institutions are market makers. They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing. The things that they do have mass…

“properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives” Spoken like someone has no clue what they are talking about and just throwing out jargon

I think specifically spoken like someone who saw The Big Short very recently

Re: US will ban Wall Street investors from buying single-family homes

#557

Post by jasonfarnon »

gbear605 wrote: post #545
klipklop wrote: post #409

Earlier quoted context omitted.

Personally I feel people and especially corporations/REITs do not have the right to hide what real estate they own. Sure put it in a trust, but the public has the right to know who controls it.

I have a friend who has someone who has repeatedly threatened to assault her, and her primary protection is keeping her address hidden from him. Should she never be allowed to own a house at risk of being assaulted?

Maybe have a limited exception then, like rape shield laws. You don't need to gut the entire framework for this rare situation. (Plus it would be fun to watch corporate lawyers try to exploit this loophole.)

Re: US will ban Wall Street investors from buying single-family homes

#558

Post by eek2121 »

observationist wrote: post #283
roadside_picnic wrote: post #48

The key word here is "Wall Street". And this statement is playing off a popular misconception around corporate investors buying up American houses. There has been a bit of a panic around "Investors buying up all the property!!!" With people often citing Black Rock and Blackstone as the main culprits. But most of the "investors" buying up property are individuals purchasing investment properties. Here's an article on…

It's not that simple - the problem is that those institutions are market makers. They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing. The things that they do have mass…

Based on the data I've seen, respectfully, you are wrong. No, I can't share it. The data is publicly available, however. Feel free to dig it up and aggregate it. The data is publicly available, the effort to dig into it, finding meaning, and sell it to folks, however, is not.

Re: US will ban Wall Street investors from buying single-family homes

#559

Post by john-h-k »

mycodebreaks wrote: post #261
roadside_picnic wrote: post #48

The key word here is "Wall Street". And this statement is playing off a popular misconception around corporate investors buying up American houses. There has been a bit of a panic around "Investors buying up all the property!!!" With people often citing Black Rock and Blackstone as the main culprits. But most of the "investors" buying up property are individuals purchasing investment properties. Here's an article on…

Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals. For the sanity in the housing market, members of society need to be driven to participate in other business activities for income/revenue, not rentals.

> there even should be a cap on how many homes an individual can own for rentals

Many people wish to rent, not buy. If we make it so each landlord can own fewer homes, but renting demand stays similar we just incentivise more people becoming landlords

Re: US will ban Wall Street investors from buying single-family homes

#560

Post by immibis »

WalterBright wrote: post #325
observationist wrote: post #283

Earlier quoted context omitted.

It's not that simple - the problem is that those institutions are market makers. They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing. The things that they do have mass…

> They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing. Raising prices when you only have a tiny portion of the market does not work. People won't buy them when there's…

It can in an extremely illiquid market.
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