Vulture investors are feasting on the depressed America’s housing market. Deflating home prices, rock-bottom mortgage rates and a rental market surging with people who have lost their homes are attracting swarms of vulture investors after distressed properties. Nevertheless, typical vulture investing strategies are changing with the bad economy.Vulture investors flipped homes for a quick payout in good times. In these troubled times, they are landlords raking in hefty, steady incomes.
Vulture investors scavenge what remains of housing market
Swooping down to buy distressed properties cheap is how vulture investors got their name. CNN reports that places wracked with foreclosures and short sales like Las Vegas, Phoenix and Miami are popular because home prices there have dropped as much as 70 percent. Vulture investors used to be known for flipping often and helping to bid up home prices to unsustainable heights. A more stable, long-term investment these days are potential rental profits. Neighborhoods may really become more stabilized by vulture investors today.
Vulture investors roll with the punches
The nature of the United States housing market today has changed the nature of vulture investing from flipping to renting. HSH.com, an online mortgage resource said the regularly increasing home prices that attracted house flippers are long gone. Getting cheap just to sell cheap doesn’t make sense. Also, millions of foreclosed borrowers become tenants for vulture investors who got into the properties for a song, because they have to wait years before they can get an additional mortgage.
Money flow a happy return for vulture investors
By paying in cash, rental returns start rolling in right away for vulture investors. Las Vegas, where prices have fallen nearly 70 percent and rents have only dropped about 20 percent, is held as an example in the CNN article. Las Vegas vulture investor Glenn Plantone told CNN he is getting money flow, or net return on investment, of 12-to-14 percent . Cash flow is the ultimate hedge against a further decline in prices, since the return on the investment just keeps rolling along.
Further reading
money.cnn.com
blog.hsh.com
No comments:
Post a Comment