Should Corporations Be Allowed to Buy Up Single Family Homes?

West Dundee Hawkeye

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Sep 28, 2003
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I always heard that the reason for the mortgage interest deduction was to encourage home ownership so people felt like they had a stake in society. Now I do think people should only get it for one house they own and we should not do it for the very affluent but for the average Joe, homes are becoming unaffordable.

I don't think corporations should be allowed to buy homes.
 

Titanhawk2

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Jul 14, 2011
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You get to deduct interest on your primary residence, not your second house if your rich. A corporation cannot have a primary residence to get a deduction. Not sure where you were getting that. Corps buy homes to provide housing for people and that cost can be a business expense. Completely different concept.
 

OrlandNole

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Nov 29, 2003
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Nashvegas
Corps buy homes to provide housing for people and that cost can be a business expense. Completely different concept.
You're conflating corporations purchasing housing with corporate housing, which are two different concepts.

What OP is referring to are corporations buying up large numbers of homes and turning them into rental homes.
 
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binsfeldcyhawk2

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You're conflating corporations purchasing housing with corporate housing, which are two different concepts.

What OP is referring to are corporations buying up large numbers of homes and turning them into rental homes.
With the stock market tanking it'll just get worse.

We have 3 of those rental properties in our neighborhood. Hard to say no to a cash buyer...
 

ThorneStockton

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Oct 2, 2009
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The OP is talking about single family home REITs or other real estate investment funds. Something like Invitation Homes INVH, or American Homes AMH.

They own 10s of thousands of single family homes around the country.

 

bhawk24bob

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Jul 8, 2001
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Corps owning rental properties is nothing new, the volume of what they are purchasing is new.

This is going down a very dangerous path though for a bunch of reasons
 
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goldmom

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The OP is talking about single family home REITs or other real estate investment funds. Something like Invitation Homes INVH, or American Homes AMH.

They own 10s of thousands of single family homes around the country.

These REITS are a bit of a headache for HOAS. They got a big start during the last recession when there were so many foreclosures and homes sat empty before hitting the auction block. The exterior maintenance was bare minimum and they were hard to get the back dues paid up. And they rented to folks who mayyybe didn’t understand that they couldn’t park a boat or RV in the driveway or yard, or have a commercial truck out there either.
The other homeowners on the block would be appalled and the “agent” was usually someone who didn’t even have a local office.
As an HOA manager those homes were one of my biggest pains in the rear.
Now most of these cash buy outfits just buys the house, cleans it up, maybe paints a few rooms and flips it.
 

Nole Lou

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Apr 5, 2002
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I'm not sure its as clear cut as "should or shouldn't be able to buy" but it's definitely something that should be looked at. It's definitely messing with the market. On the other hand, you don't want unintended consequences either, which I expect could be many if not carefully crafted.
 
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Kelsers

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Feb 5, 2003
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You get to deduct interest on your primary residence, not your second house if your rich. A corporation cannot have a primary residence to get a deduction. Not sure where you were getting that. Corps buy homes to provide housing for people and that cost can be a business expense. Completely different concept.
Good luck on deducting interest.
 

noStemsnoSTICKS

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Feb 16, 2006
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Sactown
I always heard that the reason for the mortgage interest deduction was to encourage home ownership so people felt like they had a stake in society. Now I do think people should only get it for one house they own and we should not do it for the very affluent but for the average Joe, homes are becoming unaffordable.

I don't think corporations should be allowed to buy homes.
What about private contractors who flip houses? A family member of mine (contractor) went to the bank with a business plan to buy and sell 25 homes last year and walked out with a $4,000,000 line of credit. (He lives in Oklahoma where homes are cheap.)
 

SoDakHawk

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Sep 14, 2006
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The OP is talking about single family home REITs or other real estate investment funds. Something like Invitation Homes INVH, or American Homes AMH.

They own 10s of thousands of single family homes around the country.

And when the housing market takes a dump I hope they are allowed to fail. I'm guessing they'll get bailed out by the same taxpayers that can't afford home because they have been priced out of the market.
 

LuteHawk

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Nov 30, 2011
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In the Peoria, Illinois metro area, Caterpillar Inc. would buy
the home of an employee who was transferred to another
state or nation, if the employee could not sell it in 90 days.

For example if a Caterpillar engineer was transferred to
Germany or Japan, the headache of selling a home was
made easier with this policy. It was a courtesy done to
help the engineer make a smooth transition.
 

bhawk24bob

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Jul 8, 2001
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It's not like your typical buyer can't be a cash buyer, there are lenders that will turn you into a cash buyer for 1% of the loan value.

HOA's might become a relic after the same institutional investment group gets a critical mass of voting power within an HOA.
 

kc78

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Nov 25, 2002
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Apparently it is possible for HOA's to try to put restrictions on who can purchase homes in a neighborhood or limit the number of homes that a single owner can have to at least limit the number a particular corporation can purchase. I've seen a few cases nearby where a corporation has brokered with a builder on a neighborhood that's already in progress to buy up all the remaining homes in the neighborhood, essentially taking full control of the neighborhood and HOA as well since they own the largest percentage of homes. There's a lot of issues with this which are frustrating and which I wish greed didn't drive people to partake in.
 

goldmom

HR Legend
Mar 29, 2002
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In the Peoria, Illinois metro area, Caterpillar Inc. would buy
the home of an employee who was transferred to another
state or nation, if the employee could not sell it in 90 days.

For example if a Caterpillar engineer was transferred to
Germany or Japan, the headache of selling a home was
made easier with this policy. It was a courtesy done to
help the engineer make a smooth transition.
That was standard operating procedure with most corporate moves up through the 90’s. We never had to worry about selling our house and it really helped us out.
 
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goldmom

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It's not like your typical buyer can't be a cash buyer, there are lenders that will turn you into a cash buyer for 1% of the loan value.

HOA's might become a relic after the same institutional investment group gets a critical mass of voting power within an HOA.

Block voting? Those investor groups who want to eliminate HOA’s by critical mass should be prepared to then be responsible for common area maintenance and upkeep of amenities, right? Try not doing that and see what happens to the value of your properties.
A colossally stupid move you could try...once.
 
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joelbc1

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you can’t always get what you want!
I'm not sure its as clear cut as "should or shouldn't be able to buy" but it's definitely something that should be looked at. It's definitely messing with the market. On the other hand, you don't want unintended consequences either, which I expect could be many if not carefully crafted.
Comparable to buying show tix on “the second market”? Businesses buying homes for speculation works against the rules of “supply and demand” by artificially pricing property. It just feels “slimy” to me. But this is how capitalism works and capitalism is a far cry from being fair. It rewards those with the gold.
 
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goldmom

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Apparently it is possible for HOA's to try to put restrictions on who can purchase homes in a neighborhood or limit the number of homes that a single owner can have to at least limit the number a particular corporation can purchase. I've seen a few cases nearby where a corporation has brokered with a builder on a neighborhood that's already in progress to buy up all the remaining homes in the neighborhood, essentially taking full control of the neighborhood and HOA as well since they own the largest percentage of homes. There's a lot of issues with this which are frustrating and which I wish greed didn't drive people to partake in.

Some condos do that by limiting the number of units that can be rented out at once or restrictions on short term rentals, like a 90 day minimum lease.

It’s not a typical thing in a single family HOA but recent bad incidents in some places with AirBnB have resulted in HOA actions to reduce the likelihood of repeat incidents.
 

bhawk24bob

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Jul 8, 2001
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Block voting? Those investor groups who want to eliminate HOA’s by critical mass should be prepared to then be responsible for common area maintenance and upkeep of amenities, right? Try not doing that and see what happens to the value of your properties.
A colossally stupid move you could try...once.

I've been on the shit end of the stick on this before, and I'm still pissed off about it 15 years later. There are a million ways for a determined group of owners, or one owner that owns a large voting position, to make your life miserable under an HOA thro ugh any means it wants. In my case it was billing an extra "monthly assessment" twice a year along with special assessments for everything until enough owners sold to them and they could dissolve the HOA.

When I read about builders starting a development and then taking them off market because an investment group bought every property, it's clear to me what direction this is going. Life is going to start becoming very miserable for people if they don't already own their homes and for those that do, they better hope that their homes are in fee simple without an HOA.
 

goldmom

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Mar 29, 2002
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I've been on the shit end of the stick on this before, and I'm still pissed off about it 15 years later. There are a million ways for a determined group of owners, or one owner that owns a large voting position, to make your life miserable under an HOA thro ugh any means it wants. In my case it was billing an extra "monthly assessment" twice a year along with special assessments for everything until enough owners sold to them and they could dissolve the HOA.

When I read about builders starting a development and then taking them off market because an investment group bought every property, it's clear to me what direction this is going. Life is going to start becoming very miserable for people if they don't already own their homes and for those that do, they better hope that their homes are in fee simple without an HOA.
What State was this?
 

ConvenientParking

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Some of this is bc work and some of this is political, but I don't think there's anyone I hate more in this country than people who "invest" in residential real estate. The upside to REITs is how they mess with the old fashioned mom-and-pop scumbags.
 

bhawk24bob

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Jul 8, 2001
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What State was this?

Illinois, I was forced to sell where my only recourse was to go to court, the HOA got to pick an appraiser, I got to pick an appraiser, and we had to agree on a 3rd appraiser to determine fair market value and if the determination was less than I would get from the proposed sale, I'd get the appraised value.

I think some people are going to find out what happens when they buy a single family home where their neighbors can write bylaws that control their property
 

TheCainer

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Sep 23, 2003
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You get to deduct interest on your primary residence, not your second house if your rich. A corporation cannot have a primary residence to get a deduction. Not sure where you were getting that. Corps buy homes to provide housing for people and that cost can be a business expense. Completely different concept.
They buy houses and then rent them out for more than what a typical mortgage would cost. NBC ran a story on this about a week ago. It drives a lot of first time home buyers out of the buyer's market.

Not good.
 
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I can deduct my first home interest, vacation home interest and my rental properties interest. Corporations can deduct interest for rentals just like I can. This isn’t anything new and legal assuming you follow the easy rules.
 

ClarindaA's

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Jun 3, 2002
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You're conflating corporations purchasing housing with corporate housing, which are two different concepts.

What OP is referring to are corporations buying up large numbers of homes and turning them into rental homes.
This, **** the greedy corporations
 

goldmom

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Mar 29, 2002
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Illinois, I was forced to sell where my only recourse was to go to court, the HOA got to pick an appraiser, I got to pick an appraiser, and we had to agree on a 3rd appraiser to determine fair market value and if the determination was less than I would get from the proposed sale, I'd get the appraised value.

I think some people are going to find out what happens when they buy a single family home where their neighbors can write bylaws that control their property

Sounds like a loop hole in Illinois law. 😟
 

CarolinaHawkeye

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Iowa
You get to deduct interest on your primary residence, not your second house if your rich. A corporation cannot have a primary residence to get a deduction. Not sure where you were getting that. Corps buy homes to provide housing for people and that cost can be a business expense. Completely different concept.
An individual can deduct mortgage interest on more than one residence. Been that way since Reagan.
 

Jan Itor

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Jan 31, 2009
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You get to deduct interest on your primary residence, not your second house if your rich. A corporation cannot have a primary residence to get a deduction. Not sure where you were getting that. Corps buy homes to provide housing for people and that cost can be a business expense. Completely different concept.
Corps are buying up houses and jacking up the rent. That’s what’s happened here in Arizona along with the idiots from California and New York moving here to get away from consequences of bad policies only to vote for the same asshats down here.

Shit until there’s no place left to shit, then move on (.org)
 
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bhawk24bob

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Jul 8, 2001
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Sounds like a loop hole in Illinois law. 😟

It worked as designed, unfortunately. People will use an HOA as a weapon during times of uncertainty as the dominoes start to fall in peoples' personal financial situations.
 

goldmom

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Mar 29, 2002
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It worked as designed, unfortunately. People will use an HOA as a weapon during times of uncertainty as the dominoes start to fall in peoples' personal financial situations.
I’m not sure what your personal situation was so I’m not sure about how to respond.
 

bhawk24bob

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Jul 8, 2001
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I’m not sure what your personal situation was so I’m not sure about how to respond.

Not mine, my condo was paid off and I didn't even live in Chicago anymore and was renting it with plans to rent it forever. About 80% of the owners were underwater well after 2008 and were looking for a way out but the point is that a determined ownership stake in an HOA can legitimately disrupt peoples' investments and/or their lives.
 

goldmom

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Not mine, my condo was paid off and I didn't even live in Chicago anymore and was renting it with plans to rent it forever. About 80% of the owners were underwater well after 2008 and were looking for a way out but the point is that a determined ownership stake in an HOA can legitimately disrupt peoples' investments and/or their lives.
Florida has a separate statute for condos so yes I will say that you may be referring to a whole different animal so to speak.
 

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