Making houses into rentals helps housing market and provides affordable housing
When homeowners suffer through a foreclosure, they still need a place to live. One option that is growing nationally is the opportunity to rent a previously foreclosed home.
American companies are spending billions to buy up foreclose properties, cleaning them up and then renting them back, often to people who have lost their home to foreclosure. In fact, one company is making the effort to get the home renter back into the role of homeowner as quickly as possible.
Build US Back, a company owned by Transcendent Investment Management, works with Fannie Mae to buy foreclosed properties from the federal government program and transform them into rental properties that do proffer the option to buy.
Build US Back started in the Miami-Dade County area of Florida with plans to expand into four other counties in Florida before moving into other markets east of the Mississippi once the business model proved successful. Build US Back has its own construction team to ensure its homes are repaired when necessary and maintained up until purchase and through the rental period. They also have investment personnel on staff to assist with possible future home ownership.
Colony Capital, an international firm out of Los Angeles, has also moved into the Florida market with similar plans for foreclosed homes. In March it announced plans to purchase properties in St. Lucie, Palm Beach, and Broward Counties. It has already purchased homes in Arizona, California, Texas and Nevada.
“We think as the overall market recovers, Florida is a good place to be for the long term," said Justin Chang, CEO of subsidiary Colony American Homes. "We're not looking at buying and flipping. We're buying and rehabbing and renting to families with children and pets who want to be in a single-family home."
Because of tight credit, renting is simply a better option than buying for some families.
Last November, Blackstone Group created Invitation Homes in order to purchase and refurbish foreclosed properties and maintain them as rentals. In its website introduction to Invitation Homes, Blackstone said the goal is to reduce the inventory of distressed homes on the market, helping deflated housing prices, while supplying affordable housing for families. Because many homes are in distressed neighborhoods, Blackstone said it is also helping with the economy in those places by creating jobs for rehab and maintenance.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.