I’ve been advocating tax changes to induce private capital to buy up distressed residential properties and rent them for at least a couple of years.
This article caught my eye …
Says it’s already a big trend – without tax incentives.
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Excerpted from: Real Estate Channel, Will Growing Rental Trends Undermine U.S. Home Sales?, 08/23/10
There is a far-reaching change occurring now which threatens housing markets around the country.
There is a “psychology change” in the mind of consumers: 76% now believe that renting is a better option than buying in the current real estate market
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As early as the summer of 2005, the slowdown in speculative buying in the hottest metros caused a flood of investor-owned homes to hit the rental market.
Many of these homes became rentals because the investor was unable to flip the property.
The glut of rental homes in bubble markets such as Phoenix had caused rents to plunge to half the cost of owning that same home by the beginning of 2008.
Many rental properties were attracting “displaced homeowners”.
What happens after a single-family foreclosure is that “the family moves into a rental house down the street.” The irony is that the home they are moving into may also be a foreclosure that had been bought by an investor.
The attraction of renting now is boosted by the growing vacancy rate for both houses and apartments.
With nationwide vacancy rates now well over 10%, it is extremely difficult for a landlord to even consider raising rents.
Since roughly 25% of all home sales are currently going to investors paying cash, large numbers of homes will continue to be thrown onto the rental market.
The Homa Files 
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