If investors are unable to purchase properties in certain areas, then ultimately you could see the decline of the “small business” in the area.
the undesirable “eye sore” properties in order to rebuild and make them better, which ultimately increases the value of the overall neighborhood.
PROPERTY INVESTORS BOLSTER OLDER NEIGHBORHOODS
Time takes a toll on all things. As neighborhoods age, more improvements are needed to maintain a proper standard of living. Situations like these usually cause a mass exodus of current residents into newer developments because the average homeowner lacks the resources and the desire to revitalize aging property. Additionally, these houses will remain vacant— prospective homeowners will not waste their money on properties that will cost them extra due to repairs and maintenance. Investors are the ones that ultimately pump life back into these neighborhoods. Rehabbing old properties is not the only perk investor-owned property provides: Investors also possess the ability to provide unique sources of financing to people who otherwise could not afford to become a homeowner. SMALL BUSINESS THREATENED If investors are unable to purchase properties in certain areas, then ultimately you could see the decline of the “small business” in the area. Real estate investors go above and beyond to find, improve, and maintain these properties through small businesses in the local community that know the area. Consider how many lending companies or property management companies are out there. Remember all the contractors and construction-related companies too. These industries are dependent on investors, and without them, all of these industries would be drastically changed forever. HOA REVENUE According to the Greater Houston Partnership, 8,730 new homes have been added to the Houston market alone since the beginning of July. Remember, more than 94% of all properties located in Houston fall under HOA jurisdiction. If investors own only 50% of those homes (most likely they own more), investors would be bringing to HOA neighborhoods 4,400 new people a month that will be paying HOA fees. That’s more money in their pocket. HOAs run on the capital they receive from
fund and a regular property investor. But by using the broader term, they have inspired homeowners’ associations across the country to pass provisions to limit investment into their communities. One HOA group took this to the extreme, attempting to pass provisions so that no investors could buy any properties in their neighborhood. They seemed to be leading the charge and were able to get an interview published with the Wall Street Journal a second time, which was also rereleased on realtor.com. This ultimately led to other HOAs trying to follow suit. The HOA communities believe non-homeowners will not maintain the property as well as a homeowner, directly decreasing the values of the homes as a result. This is truly their only concern. You can see this in multiple articles written on these topics. Frankly, this information is misleading. Today we are here to debunk some of the current myths and provide more insight on what is actually taking place. WHERE IT STARTED The issue stems from hedge funds buying vast amounts of properties in neighborhoods. Given their immense capital, hedge funds have a unique ability to buy hundreds, if not thousands, of homes. Although they have the leverage to buy all these properties, they do not have the resources to maintain them sufficiently. They profit off the sheer number of properties they can turn over, not the value they create by rehabbing. For the average investor, the intent is different. Average investors see properties as individual projects, extracting value from these investment homes so they can either sell it at a higher value or keep good tenants in there and build passive income. Historically, HOAs welcome these types of investors because they will buy
22 | think realty magazine :: november – december 2022
Made with FlippingBook Online newsletter