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Investor landlords shape the rental market

Corporations take over rental housing at all levels.-- new challenges for renters and communities

Are mom and pop landlords becoming an urban legend?

     Ownership of rental housing is changing before our eyes. In the aftermath of the Great Recession, investor owners are gobbling up rental properties at every level from single family to large multifamily buildings. New data from the Joint Center for Housing Studies confirms what we've been learning about rental housing from news stories: rental owners are increasingly owned by investors. Mom & Pop who lives down the street and collects rent to pay their own mortgages is becoming an urban legend. Even Mom & Pop owners are incorporating and they are joining the local chapter of the Real Estate Investors Association.

Corporate and absentee ownership is not just a "coastal" thing. Lots of news stories report that cities like Cleveland, Columbus Dayton suburb Huber Heights and Toledo are hot markets for investor owners.

Here's some ideas of how things may be changing for tenants.

1. Your landlord lives in Dubai or Hong Kong. You can't walk down the street or even across town to tell him or her about the backed up sink. Most likely there's a 1-800 number with an answering machine...or else a webpage with an electronic form to fill out and submit.

2. If you have a rental dispute, you will need to be able to plan like a lawyer or have a lawyer. A study by the Atlanta Federal Reserve suggests that corporate owners are more likely to head to eviction court than to "work it out."

If you are a social service provider, it's less likely that you'll be able to call a local landlord who often times has a vacancy and is sometimes willing to take a chance on a "high risk" tenant. This week we learned that Pennsylvania is beginning a program to pay landlords to waive stringent admission criteria to house "high risk" tenants. Who is "high risk?" Tenants with bad credit scores, a criminal background or a history of evictions. Just a decade ago, a "mom landlord" in Mansfield told RHINO that she always rented to folks who had been through bankruptcy because "they have learned their lesson...they pay on time and in full" That's not the way landlording works now.

For advocates, community planners and program managers, absentee and corporate ownership makes it hard to know who is a decision maker and who's just a placeholder. In Akron, seniors is a senior-only building are being harassed by grandchildren and guests of one of the residents. The local manager is helpless to do anything. "That's up to 'corporate' to handle." After a lot of phone calls and emails, it turns out that the key decision maker is the corporation's attorney. After weeks, the problem is getting some attention.

Civic engagement, political participation and community building can suffer. If you are a homeowner in a single family neighborhood, your neighbors are increasingly likely to be a tenant. They may moving soon to follow a job. Why bother to form a street club, or hold an event, or register a tenant to vote? Leaders at all levels will need to reshape their messages to include the new "renter nation."

As far as tenants dealing with corporate owners, here's some basics: Know your rights. Put everything in writing. Keep copies.
posted 8-26-17
 What's News?

September 18, 2017, Flipping is alive and well in Ohio
     The latest quarterly report by ATTOM on house flipping shows continued strength in Ohio. The study defines flipping as "a property that is sold in an arms-length sale for the second time within a 12-month period." While flipping was stable overall held steady nationally in the second quarter of 2017, Ohio and other rust belt areas saw interesting increases.
  • Highest home flipping returns in Pennsylvania, Louisiana, Ohio, New Jersey, D.C. Homes flipped in Pennsylvania yielded the highest average gross flipping ROI nationwide in Q2 2017 (103.1 percent), followed by Louisiana (100.0 percent), Ohio (88.9 percent), New Jersey (81.7 percent), and the District of Columbia (81.2 percent).
  • Nationwide 40.3 percent of all homes flipped in Q2 2017 were purchased as foreclosures or as bank-owned properties (REO), down from 43.3 percent in the previous quarter and down from 44.4 percent in Q2 2016. A high of 70.4 percent of homes flipped in Q1 2010 were purchased as foreclosures or as REOs. States with the highest share of Q2 2017 home flips purchased as foreclosures or as REOs were Indiana (61.1 percent), New Jersey (60.0 percent), Maryland (59.4 percent), Illinois (52.7 percent), and Ohio (52.3 percent).
  • Among 101 metropolitan statistical areas analyzed in the report, those with the highest average gross flipping ROI were Pittsburgh, Pennsylvania (146.6 percent); Baton Rouge, Louisiana (120.3 percent); Philadelphia, Pennsylvania (114.0 percent); Harrisburg, Pennsylvania (103.3 percent); and Cleveland, Ohio (101.8 percent).
  • Other markets where the Q2 2017 home flipping rate increased at least 10 percent from a year ago included Birmingham, Alabama (up 22 percent); Grand Rapids, Michigan (up 20 percent); Dallas-Fort Worth, Texas (up 13 percent); Oklahoma City, Oklahoma (up 12 percent); St. Louis (up 11 percent); Providence, Rhode Island (up 11 percent); and Cincinnati, Ohio (up 10 percent).

September 1, 2017 Toledo rentals in high demand. Rents up. Sales of rental units up. 
A report out of Toledo echoes what we've been reading about on the coasts--demand for rental properties is hot. "Apartment living space in metro Toledo is in high demand, which in turn is pushing the apartment ownership market into red hot territory."                     

April 19, 2017 Columbus Dispatch More evidence of the strength of the rental business in Ohio
A while back RHINO cited a story about how investors were finding high Return on Investment (ROI) in RustBelt cities. Even though rents are lower than in coastal and sunbelt markets; unit cost are much lower than in hot rental markets, so ROI is higher. Here's another example 
from the Dispatch: "Homebuyers aren’t the only ones combing central Ohio for real-estate deals. In the past three years, investment firms searching for bargains outside the nation’s largest cities have paid more than $1.2 billion for 145 central Ohio complexes containing 30,000 apartments, according to Yardi Matrix, a commercial real-estate data company that tracks complexes with at least 50 apartments. 'Interest from investors is incredibly strong,' said D.J. Effler, senior vice president of Bellwether Enterprise’s Columbus office. Last year, it arranged financing for more than 60 real-estate deals, among them 20 Columbus-area apartment transactions including the Enclave at Albany Park in Westerville, and Lake Club and Enclave Village in Columbus."
Don't let public officials tell you that landlords are strapped and can't afford to make health and safety improvements.

 Notes & Links 

Single family Rental

Rent to own or Contract to Deed scams

Moms&Pops incorporate

Subpages (1): Single Family Rental