They buy with cash, and tend to hold houses indefinitely. Which is another reason sales are decreasing. Humans sell their houses for a myriad of reasons. A corporation that rents housing isn’t going to sell unless the corporation shuts down. They’re going to keep that steady rental income because humans can’t afford a mortgage to stop renting.
Corporate landlords are buying with loans. If you have the cash to buy one house outright you will instead put 10% down on 10 houses and have 10 houses to rent. See an accountant for details - including what the best amount to put down is (I picked 10% only because it makes the math easy)
When interest is high, borrowers can’t afford to get a mortgage, and corporations pay cash.
But theyre not getting mortgages, they’re getting business loans. And they’re not making down payments, they’re using existing property as collateral on the loans.
I’d say that’s something a layman wouldn’t know and someone might need to talk to an account, but our most recent ex-president is going through a pretty high profile court case about it right now…
I dunno, as an actual accountant it’s not like I deal with any of this stuff on a day to day basis. I don’t know what knowledge I’ve gained through mitosis, but I did assume everyone would know without having to explain that. So maybe you’re right? Or maybe you just don’t understand it so you think no one else can?
If you cannot get a loan, then real estate is a much less powerful investment. Cash flow is key, if you have one properties that you put each down $20k, pay $1000/month on and rent for $1200 that is $2000/month in extra cash. If you instead buy the property for 200k you get $1200 in cash per month. Of course in reality you will never have all your property rented all the time, so it is more reasonable to say with 10 properties you get $1600/month - and sometimes get a $200 bonus while with 1 you sometimes have $1200 and sometimes $0 - which is much harder on the budget.
Of course anyone thinking about this needs to see an accountant to run all the different numbers, but in general real estate generally only makes sense if you can take a loan and thus have less risk.
But corporate landlords don’t pay mortgages…
They buy with cash, and tend to hold houses indefinitely. Which is another reason sales are decreasing. Humans sell their houses for a myriad of reasons. A corporation that rents housing isn’t going to sell unless the corporation shuts down. They’re going to keep that steady rental income because humans can’t afford a mortgage to stop renting.
Corporate landlords are buying with loans. If you have the cash to buy one house outright you will instead put 10% down on 10 houses and have 10 houses to rent. See an accountant for details - including what the best amount to put down is (I picked 10% only because it makes the math easy)
If interest is cheap, sure.
When interest is high, borrowers can’t afford to get a mortgage, and corporations pay cash.
But theyre not getting mortgages, they’re getting business loans. And they’re not making down payments, they’re using existing property as collateral on the loans.
I’d say that’s something a layman wouldn’t know and someone might need to talk to an account, but our most recent ex-president is going through a pretty high profile court case about it right now…
I dunno, as an actual accountant it’s not like I deal with any of this stuff on a day to day basis. I don’t know what knowledge I’ve gained through mitosis, but I did assume everyone would know without having to explain that. So maybe you’re right? Or maybe you just don’t understand it so you think no one else can?
If you cannot get a loan, then real estate is a much less powerful investment. Cash flow is key, if you have one properties that you put each down $20k, pay $1000/month on and rent for $1200 that is $2000/month in extra cash. If you instead buy the property for 200k you get $1200 in cash per month. Of course in reality you will never have all your property rented all the time, so it is more reasonable to say with 10 properties you get $1600/month - and sometimes get a $200 bonus while with 1 you sometimes have $1200 and sometimes $0 - which is much harder on the budget.
Of course anyone thinking about this needs to see an accountant to run all the different numbers, but in general real estate generally only makes sense if you can take a loan and thus have less risk.
Corporate landlords don’t own a high enough % of residential real estate to have that much influence.