[quote=UCGal][quote=CA renter]When I refer to the ~40% being investors, I’m including the off-market stuff like bulk sales, bulk MBS purchases, etc… in addition to flippers, landlords, second-home “investors,” etc. Hundreds of billions of dollars (trillions???) are being transacted that we are not privy to. What we see on the MLS is likely a very small portion of what’s really going on, IMHO.
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Why are landlords who buy a property, hold it, rent it out, pay the mortgage, insurance, maintenance, etc in the same category as bulk sale buyers and flippers?
Disclaimer – I’m considering getting into the landlord business if I can find a deal that pencils. And I’d pay cash at the steps if it would get me a better deal. I’d be stupid not to consider trustee sales as a way of reducing my investment hit.[/quote]
They’re not technically in the same category, but I personally believe that a society is better served when the vast majority of families can buy their own homes at low prices. Being a landlord is just another way of taking inventory off the market for families who want to buy their own place. Instead, they are forced to rent from the LLs who are competing with them for purchases.
Again, even I am considering buying ONE house (that we’d be willing to live in if necessary) as a positive cash flow rental, mostly because it would be a hedge in case my deflation theory is wrong.
At the very least, we should eliminate Prop 13 protection for residential investment properties — with the exception of multi-family dwellings and rent-controlled SFHs. We should also eliminate the MID and property tax deductions on rentals, IMHO. There is no reason for taxpayers to subsize the profits of landlords, especially in a time when our local, state, and federal govts are going broke.
I admit to a socialist bent, and think that labor should be valued equal to or more highly than capital (and all of my personal income comes from investing/long-term speculating in the stock & bond markets, and from making direct loans to small businesses owned by people I know, so this is not about what’s good for me, personally). I just think that society is better served when there is a strong middle class, and when the wealth disparity is less extreme.
