Rising home prices spawn new crop of landlords

Mom-and-pop investors are replacing funds that swooped in during recession

TRD New York /
Feb.February 24, 2017 09:01 AM

With home prices rising and the rate of homeownership plummeting, there’s a new crop of landlords in town.

Small investors — mom-and-pop landlords, if you will — are increasingly scooping up property and treating them as rental investments, Bloomberg reported.

Last year, 37 percent of homes were sold to people who didn’t live in them, according to tax data analyzed by Attom Data Solutions and ClearCapital.com Inc. While the properties could be second homes for some, signs point to mom-and-pop investors increasingly buying properties and becoming landlords.

In the wake of the financial crisis, private equity firms swooped in and bought cheap homes. Institutions accounted for 7.8 percent of home sales in 2012, notes Bloomberg. But that number fell to 2.9 percent last year, thanks to rising home prices.

Small investors, however, still see an upside to owning rental property particularly in cheaper markets where profit margins can be greater.

What that means for the overall market is still unclear. “On one hand, landlords are filling a need that exists because of the low homeownership rates,” said Daren Blomquist, senior vice president at Attom. But, “They may also be crowding out folks that want to be homeowners but can’t compete with investors.” [Bloomberg]E.B. Solomont


Related Articles

arrow_forward_ios
From left: the Ritz-Carlton, 32 East 1st Street, 560 West 24th Street, 301 East 80th Street and 32 West 85th Street

Five priciest homes new to market include 1897 townhouse

Ed Gilligan and 3 East 94th Street (Credit: Getty Images, Compass)

Don’t leave home without $21M: Amex exec’s widow sells townhouse

Berlin, Germany (Credit: Getty Images, iStock)

Rent freeze in Berlin ends calls for expropriation, but may spark disinvestment

From left: Jed Wilder, Bess Freedman, Richard Grossman, Josh Sarnell and Adam Mahfouda (Credit: Emily Assiran) 

Agents to StreetEasy: The fee is too damn high

40 East 72nd Street (Credit: Google Maps)

Nightmare on E. 72nd Street raises question: Are small condos risky?

Jed Garfield of Leslie J. Garfield; Richard Grossman, president of Halstead Real Estate; Sarah Saltzberg, principal broker and CEO of Bohemia Realty Group; Douglas Elliman’s Howard Lorber

NYC brokers slam bias, promise action after Newsday exposé

The bombshell probe also found that minorities had to meet more stringent financial qualifications than white buyers. (Credit: iStock)

LI agents routinely discriminate against minority buyers, undercover probe finds

(Credit: iStock)

The city’s rental growth is slowing

arrow_forward_ios