Supplying pre-packaged rentals will stabilize the housing market

Oct 6th, 2011  
by IrvineRenter  in Library News

Astute Observations

Astute Observation by Leviathan
2011-10-06 09:22 AM

Slightly off topic, but I heard a radio commercial yesterday here in Chicago that really surprised me and wanted to hear what you thought about it.

A local builder is trying to lure families stuck in their underwater starter homes to buy new.  So they are offering not only to help finance the new home, but also assistance in renting out your current property so it is less of a burden (or, maybe for a lucky few, a break-even proposition).  I think they said they would actually manage the property, find renters, insure against damage, and guarantee cash flow even if there are gaps between renters!  I can’t remember whether it is for a period of 6 or 10 years, but this is long-term.

Has anyone heard of similar incentives?  Are they growing more common?  Any thoughts on the wisdom of such ideas?

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Astute Observation by IrvineRenter
2011-10-06 11:22 AM

Builders will do whatever they must to generate sales. They also see the huge number of potential customers who are trapped and they are trying to devise a way to reach these people. It sounds like quite an expensive incentive program, so I don’t know how feasible it is. It sounds like a good deal for both parties if it works, but I question how the deal will get financed. Banks are very leery of the buy-and-bail problem.

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Astute Observation by SanJoseRenter
2011-10-06 02:30 PM

I would suggest you read over the fine print.

“Guarantees” have a tendency to get omitted in contracts.

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Astute Observation by FreedomCM
2011-10-06 04:04 PM

Now, these units are being fire-sold for $275,000.


fire sale?  $1700/month rent for a dreary cramped 1bd?

get back to me when those are under $1k/month

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Astute Observation by rkp
2011-10-06 05:52 PM

OCFlipTrack - i remember that blog!  i used to read that before IHB.  wonder what ever happened to him.

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