I see a ton of hate for these corporations that buy homes and convert them to rentals. I haven’t seen any actual discussions on the pros and cons rather just a lot of emotionally charged hate.
This is basically how it goes – these companies are buying up all the entry level single family homes, converting them to rentals and then charging exorbitant amounts of rent. This creates a loop where renters can’t afford to save to buy therefore are stuck renting forever. Because of that these corps goal is to create a renter nation where they get a constant stream of cash flow and own all the assets and everyone else is stuck renting and never gaining any equity.
But there is an assumption baked into this theory that all renters are would be buyers or that they are want to be buyers. I haven’t seen any actual data to support what percentage of renters are in this category. People fail to recognize that there are people out there that want to rent (given it is affordable, or more affordable than buying). The reason I know this for sure is because I was one of them. There are lots of reasons that renting is better than buying depending on the person/families place in life, their needs etc.
So these corporations are satisfying a market that is full of demand. A lot of people make the argument that this demand is driven by the increase in housing costs pricing people out, and that the increased housing costs are caused by these corporate buyers – can anyone provide some data to support this that isn’t anecdotal?
I would argue that these purchases and conversion to rentals is putting downward pressure on rental prices and therefore allowing more people that want to rent the ability to do so. If this downward pressure wasn’t there the rental market would be even higher than it is now. As more rentals are created rental costs will go down (relatively, not nominally) and renting a SFH will be more attainable to the people that want to rent them.
From my point of view, the biggest reason people don’t like renting is because its so expensive. So how does stopping these corps from creating rentals help the rental affordability problem?