After the great recession, which put countless people unexpectedly out of their homes, large investors showed up and bought up single family homes. Since you can only buy what is for sale, and many of these distressed properties were in challenged neighborhoods, the large investors are well represented there. But is that a problem?
On the face of it, the answer should be no. Large builders like Lennar build homes all over the US. Commercial real estate is often owned by non-local entities. But when an LLC from Georgia owns over 240 single family homes in the Twin Cities, you might wonder why.
Property management is a very hands on endeavor, especially when there are problems. You might want to think of owning from a distance as an extra carrying cost. Then the question becomes, what are the benefits which counter the cost.
Pro-renter advocates will say it is to jack up the rents and sluff off on repairs. But for as often as I hear that, or see it referenced in print, the claim is never followed up with any documentation. If there are studies showing that out of town landlords have more complaints registered against them, more legal battles, more licensure problems, I haven’t seen the data.
I’d be more curious about the sequence of title changes and debt registered against these properties. Perhaps it’s normal for an LLC to sell the asset to another LLC with one letter changed in the name. Perhaps there’s nothing suspicious in the escalating debt on the property. Perhaps there’s nothing illegal going on.
But I’d be curious to know.