Rental only neighborhoods?

[White Cat]

Oh, I can totally see the sense of this from an investor standpoint. Especially now with home prices and interest rates so high. I do wonder how they'll far if interest rates drop down where they were for over a decade. But I'm not sure that will happen.

If that happens prices will go up and they dump the homes fast in a hot market. Remember too they are building/buying at cost.

 

[GreatLakes]

This place has had neighborhoods around me for at least a decade.

https://www.byredwood.com/

they are called apartment neighborhoods but they are all clusters.

 

[Rex1993]

The other reason you are seeing more of this is that it enables the developer to avoid costly litigation regarding construction defects. In Georgia the statute of repose is 8 years. In CA it's 10. What this means is that standard tract communities have the HOA bombarded by attorneys looking for work around two years prior to the end of the statute. They then litigate various "construction defects" and get big settlements out of the developer. This is not to say that there aren't legitimate situations where construction defects should be litigated but it's turned into a turn and burn business model for big law firms.

 

[china mom]

.

I disagree with the notion that renters don’t take care of the property as owners will. I think it really depends on the rental class, etc.

I know many homeowners that let things go simply because between mortgage, property, taxes, and what not they don’t have the money to maintain upkeep. I know bad financial situation, but that is fact. We once had two neighbors down the road that had a horrific garage door that was literally falling apart, and he simply put plywood to shut the holes and it was a big eyesore. he simply didn’t have the money to fix it and he was an owner. Renters on the other hand. If there’s a problem will call the landlord and most cases right away to get something fixed or something and there’s always a threat of not getting your deposit back if you trash a place.

I think the benefit of having corporations invest and rent these you’re basically kind of guaranteeing maintenance as it’s their interest. On the other hand, if these companies are getting incentives from the state or county, then there also needs to be some control on what rents they are charging to make it affordable as I believe that’s the whole point. I think there’s a balance between ensuring affordable housing and maintaining it with a profit Versus disrupting a market due to outside investment. You hear horror stories in other cities where you have corporations come in simply to make a huge profit, distort the rental market.

I have been to a few government meetings where a developer was seeking to build and the county or municipality involved did not give incentives but instead, based the building permits on a percentage being affordable housing. In these cases, it was build to sell but the same principle would apply for build to rent.

 

[White Cat]

The other reason you are seeing more of this is that it enables the developer to avoid costly litigation regarding construction defects. In Georgia the statute of repose is 8 years. In CA it's 10. What this means is that standard tract communities have the HOA bombarded by attorneys looking for work around two years prior to the end of the statute. They then litigate various "construction defects" and get big settlements out of the developer. This is not to say that there aren't legitimate situations where construction defects should be litigated but it's turned into a turn and burn business model for big law firms.

True, in Fla it’s 10 years. Most people have no idea about this or how it works. It’s awful and needs changed.

 

[sasywtch]

We have a rental only housing development being built here. It is being built by a company that already owns 1,000 rental houses here that they bought one at a time in different neighborhoods. This is the first rental only housing development project I am aware of here. But the rental market is nuts here, as I noted in my other reply.
https://www.abc10.com/article/news/...nity/103-6c803133-e84a-44b6-aac9-8dab61f16d34

$3000 a month in Rancho Cordova? Yikes. The problem I see with this is, the bay area investors are the ones that bought up a lot of the homes/apartment complexes in the valley and started charging the high rents. I don't see any difference in Blackstone being any different. I see this as an excuse to raise rental rates and building costs higher.

 

[tony67]

Must be a clause written into your local lease agreements. Section 8, whether administered by HUD, NYCHA, or NYS, does not vet or evict voucher recipients on this end; that’s the landlord’s sole responsibility and right.

Yeah was not going to get to into it, but its not so easy to get them out once they are in, so if you get a bad one good luck.

I have family members that are bad ones and I feel really bad for their neighbors over the years.

In one case it was a very high end apartment building, oddly enough in my state even ridiculously expensive apartments have section 8 apartments and low income housing. Of course my nephew was breaking into apartments well people were at work paying taxes to pay for his apartment...nice He is much better now, but they never kicked the mother out. Oh and he does not speak to his mother she seems to be the issue.

Next she was in a house next door to an older WWII Veteran. She had a pet chicken that was bothering the entire neighborhood and there was nothing that could be done. I am pretty sure the veteran took care of it. (BTW - this poor guy had lived\owned the house next door since 1952 and now had to put up with this problem)

In her next place, where she has been for many years, she is constantly a problem. The owner does not care because the rent gets paid and he does not have to do anything - its a 4 family house and all section 8, but she is the main problem. Funny enough my dentist office has a view of the place. Well I was getting some work done the dentist was complaining about the women in the house across the street, how often the police were there etc..
Best part - she keeps asking us to let her move into the apartment I have vacant....yeah right.

Once they are in its next to impossible to get them out, and the state you are in is also most likely a factor.

One of the bigger issues I have seen is when the folks try to get back on their feet. So they get a job and then they have to pay more rent and fall behind. It not worth it for them to work. They are trapped. Its really hard to get out of it once you are in. Then you start to learn the tricks of the trade and why would you get out of it.

Its also quite common for a boyfriend to move in, even though its not technically legal.
For some odd reason they always seem to be roofers.
As long as the rent gets paid the landlord really does not care.

 

[barkley]

i have to wonder if holding onto the homes and then selling all at once is also a protection against certain state's laws that protect home OWNERS. (not sure if it's still on the books but...) california had a law wherein a homeowner could claim that the actions/activities of a neighboring home had a detrimental impact on their enjoyment/use of THEIR home and if push came to shove the owner of the offending house could be forced to sell the home. i had a co-worker who banded together with her neighbors and successfully forced the sale of a rental home on a primarily owner occupied street in a subdivision when the rental owners failed to act on their tenant's outrageous behaviours. if an investment company built an entire neighborhood and sold the houses at different times vs. all at once they would be on the hook for their tenant's behaviours with respect to the owner occupied homes. sell them off all around the same time and minimize/eliminate that risk.