Bulk Home Investors Support Recovery but Cause Problems
There’s no doubt about it; real estate is HOT right now in many markets, including Phoenix. Hedge funds, investment companies and other organizations with large amounts of money to invest are jumping on the real estate bandwagon and buying single family homes as rental properties. In fact, we’ve been seeing an increase in the home buying activity by large investors that hold thousands of rental homes.
On the investment side, this type of investment can generate a healthy return. However, there are concerns that these “mega landlords” will have a negative impact on the rental market and local neighborhoods. When a relatively small number of companies controls the majority of rental homes, they can also control enough of the market to drive up rental rates. And, many fear these large companies won’t be able to keep up on the maintenance of their rental properties, which can drive down the values of the surrounding neighbors.