Corporate Buyers: Coming Soon to a Community Association Near You?
Corporate investors are snatching up homes in community associations across the country and renting them out. Not surprisingly, “regular” homeowners in these communities aren’t too happy with the results.
“If a board thinks this will never happen because of the price points of their homes or whatever, they’re gravely mistaken,” says Scott Weiss, of counsel for the Nashville, Tenn., law firm Ortale Kelley. “It’s happening everywhere.”
“It’s gigantic right now, especially around Charlotte and Raleigh,” says David Wilson, an attorney with Black, Slaughter & Black, P.A., which works with community associations in North and South Carolina.
A joint analysis conducted by two North Carolina newspapers found that at least 40,000 single-family properties in North Carolina are now held by about 20 institutional investors. The investors own one-quarter of all of the rental houses in Mecklenburg County, home to Charlotte.
The analysis found that this strategy isn’t new but instead dates back at least a decade. “From what I’ve read,” Wilson says, “it began around the financial meltdown. All these corporate buyers seemed like saviors at the time.”
Brad van Rooyen, president of HomeRiver Group-Florida, the management company for about 160 associations in the state, can back that up based on his own experience. “In the association where we live, as we were coming out of the housing downturn, we noticed more investors were coming to buy homes because of how much prices had dropped.” What was novel then has become a juggernaut now.
Read the first part of this two-part article now and learn more about how this not-so-recent phenomenon is playing out: