New REITs are Betting on Local Real Estate Markets
In a sign of the times, large Real Estate Investment Trusts are forming specifically to invest in local real estate. This time they are not buying up exotic mortgages like they did in the early 200’s, but instead they are buying up actual houses. Local investors may soon find them selves biding against billion dollar REITS like Silver Bay, The Blackstone Group, or Two Harbors.
All of their activity is driven by rock bottom foreclosure prices and low interest rates, market conditions that are also fueling the current real estate recovery. These REITS are on their way to becoming the new landlords of America – owning tens of thousands of distressed properties that t hey will fix up and rent. At a point in the future the economy will be strong enough that these groups will liquidate their portfolio of homes, most likely for a lot more than they paid, return dividends and investments to their investors, and then close.
All in all this is a actually healthy for the market overall.
These large investment REITS will pool resources and absorb the excess foreclosure inventory. This will push housing prices up becuase of the lack of cheap distressed homes that blight neighborhoods and bring down their values. If these REITS can create relationships with local property management companies they could have major positive impacts on local real estate nationwide including Cincinnati. For more information on the REITS check out this CNBC article.
If you are looking to invest in rental property call me. I work with numerous investors finding properties for rentals and for flips. 513-518-1140.
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