The Implications Of Investor-Owned Foreclosures
In recent years, thousands of foreclosed homes across the country saw new life as rentals owned by investors. The Urban Institute has started taking a closer look at these properties, and just published the first report in what will be a multi-part series examining a few case studies.
The first report concentrated on Atlanta, a city that was hit particularly hard by the housing crisis. The researchers interviewed investors, real estate agents and non-profit employees in the city’s Fulton County in an attempt to better understand the practices of investors who seek out single-family homes to rent and to track the flow of these properties in that area.
Here are a few of the main findings from the report:
- Like investors in other cities, those buying foreclosures in Atlanta with the plan to rent them out used cash. In Atlanta, there was a general trend away from short-term buying and “flipping” in 2008-2009 towards buying with the intent to rent in 2010.
- The rate of return for cash purchases of REO properties ranged from 8 to 15 percent. Investors typically put in between $19,000 and $70,000, which included the purchase price and cost of renovations.
- Investors in distressed neighborhoods often prefer tenants with Section 8 housing vouchers. (UrbanTurf has found that this can also be the case in DC.) The report stated that, in addition to the stable rental stream, the voucher creates an incentive to pay bills on time and tenants may be less disruptive.
- Demand from owner-occupants has lessened due to tighter credit standards. The reduced proportion of owners can make a neighborhood less desirable, the researchers stated.
Check out the full report here.
See other articles related to: reo, reo properties
This article originally published at https://dc.urbanturf.com/articles/blog/the_implications_of_investor-owned_foreclosures/6640.
Most Popular... This Week • Last 30 Days • Ever
If there was ever a place where the old adage “one man’s trash is another man’s... read »
In this article, UrbanTurf will explain what special assessments are, how they work, ... read »
The median price of a home in the region in April rose to $640,000, well above the pr... read »
This week's Best New Listings includes a four-bedroom home in Hyattsville, a chic Dup... read »
The question of too many schools; the dog-friendly rental cities; and the changes afo... read »
- Tile, Furniture, Appliances & (Much) More -- The Local Warehouse Chock Full of Salvaged Home Goods
- What Are Special Assessments in Condo Buildings and What Do They Cover?
- DC-Area Home Prices Shatter Record in April
- Best New Listings: 140 Years in Hyattsville, 100 Years in Bethesda
- Friday's Must Reads
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Start browsing below!
First-Timer Primers
Intro guides for first-time home buyers
Unique Spaces
Awesome and unusual real estate from across the DC Metro