Zero interest rates. Wall Street shysters. Government support. Million of foreclosures. Gullible dupes. What could possibly go wrong?
The Crowded Trade: Buy-To-Rent Housing
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
Demographically, it appears there is a generational glut of single-family suburban homes on the horizon.
A key piece of the story is being left out of all the sell side research and financial press “housing recovery” stories. In the case of Phoenix — and most likely most other heavily distressed regions turned ‘investor havens’ throughout the nation — it looks like the missing piece of the story is the lackluster demand for the mega-supply and nowhere remotely close to the rental returns investors had hoped for unless you bought the right property in a relatively small window that slammed shut in early 2012.I have also believed for a long time that the lack of foreclosures — and the mortgage modification/workout bubble — would ultimately be a killer for those hoping to rent houses to distressed borrowers. Of course, that’s because the banks and gov’t let all these potential borrowers rent their own houses from them at 2% interest only for 5 years. And this is exactly how it’s playing out.