[belligeront]

What are peoples concerns here?

3 companies owning 11% of the single family homes available for rent in a metro area doesn't seem like a massive concentration of ownership. Some people prefer to rent rather than buy. Some people don't have savings for a down payment. Someone needs to own the houses that these people rent.

There are probably economies of scale to managing rental properties (e.g. larger companies can hire full time maintenance staff). Some people prefer to rent from small-time landlords, but those can have there problems too.

Is it the maze of LLCs? That does seem problematic.

[estebank]

11% may not sound like a lot, but it is enough to manipulate pricing of the available housing stock.

[lotsofpulp]

If they have so much pricing power, why are their returns less than SP500? Who would want to lose money compared to a risk-less investment where you don’t have to do any work?

[epistasis]

If so then antitrust laws kick in from three different companies colluding on this.

However, I'm skeptical of much pricing control. Few other markets have such widely distributed market share. There is some stickiness in that people don't want to move often, but unless there's a major shortage (which would be the true cause of high prices), it's hard for a 5% owner to exert much on the market.

[anonuser123456]

Not when it requires collusion between 3 separate legal entities.

[ThinkingGuy]

Theses companies are part of a larger trend of the Atlanta rental market coming to be dominated by investors. The Atlanta Journal-Constitution did a whole report on this last year:

https://www.ajc.com/american-dream/investor-owned-houses-atl...

[tppiotrowski]

I think there's concern that if you manage to buy 11% then you can keep expanding. We've all seen what happens when a company captures enough market that there are no alternatives left:

Netflix, Prime: commercials and limiting devices per household Gmail: no longer unlimited storage as promised OpenAI: still competing so remains to be seen

If these companies are being subsidized by investors to capture market those investors will want a return and things will get nasty.

[0_____0]

Netflix, Amazon, Hulu, Paramount, Disney??? There's a crapton of players trying to make streaming happen, and no evidence that they're making massive margins.

[ghaff]

Many people complain about streaming fragmentation not the other way around. And it's an extremely optional product.

And did Google ever actually promise unlimited storage for all time? (And there's still a lot of free storage. I finally broke down and added some more but just so I could avoind managing how much I was using.)

[mrbgty]

companies buying up property drives prices of homes up

they are operating under a completely different model than individuals and can more easily shoulder paying more now in order to make up for it later.

kind of like two people playing the same game with a different set of rules.

[skyyler]

> Some people prefer to rent rather than buy.

Why would someone prefer to give away money instead of invest it into their net worth ?

Are there really people that prefer renting, and wouldn’t buy even if they could afford to? Are they common?

[bombcar]

Yes, a moment's thought should reveal that this is the case.

Buying and selling a house costs about 10% (or more) (realtors, expenses, etc). So if you buy a house today for $200k, and sell it tomorrow for $200k you will lose about $20k. (Yes, there are flipping tricks and stuff you can do to reduce that, but there are costs for normal transactions.)

So the rule of thumb is "about seven years" - if you buy today, and sell in seven years, appreciation and such will "break even". Certainly if appreciation was insanely high, that will be a shorter period, if it is bad or a crash happens, it may be longer or even underwater.

But whatever the time period is, if you will not live in the house for that number of years, you're better off renting, unless rental prices are so high as to invert it.

Another example of this is where businesses often prefer to lease (even so far as to triple-net) for tax purposes and to free up capital.

[skyyler]

>88% of Americans would rather own a home than rent. Specifically, 76% of renters would rather own a home, but only 2% of homeowners would rather rent.

https://www.lendingtree.com/home/mortgage/homeownership-rent...

[bombcar]

I suppose most homeowners that want to rent sell and become renters, so we can deduce that 20-24% of renters actually want to rent, and some percentage of the remainder might go back to renting if they had a bad ownership experience.

Though some percentage of those renters are in highly favorable situations, like rent-controlled units that would be insanely more expensive on the open market.

[skyyler]

>I suppose most homeowners that want to rent sell and become renters

I see, so maybe selling isn't that big of a hassle then? People keep bringing it up as evidence that people would rather rent, but that really doesn't seem to be the case.

[bombcar]

Selling is a huge hassle, but it's not something that prevents you from doing something the way not having money prevents you from buying.

[rad_gruchalski]

> Why would someone prefer to give away money instead of invest it into their net worth ?

You mean… how. Cash? Mortgage? Buying is easy, running the thing not necessarily. What are you going to do if you lose the job? Health? What’s your plan for when you get old? Do you see the work around the house?

Do you remember Lehman Brothers and why it happened? Because so many thought they could afford it! Have they increased their net worth?

Is that a new build? Second hand? How old? When is the roof to be replaced? Hows the isolation? What’s the quality of windows and doors? Is the electrical installation ready for solar panels? And so on…

> Are there really people that prefer renting, and wouldn’t buy even if they could afford to?

Obviously.

[richwater]

Rent (in dollar terms) is the most you will ever pay per month.

Mortgage (in dollar terms) is the least you will ever pay per month.

Combine that with the ease of movement between renting and owning and it's absolutely something many people prefer.

[ghaff]

I'm glad I own a house but it can be a massive headache, expense, and time sink. It also places a big constraint on moving as you say. I absolutely wouldn't have wanted one the first 15 years or so out of school and I've been lucky enough that jobs have never forced me to move.

[freitzkriesler2]

Ease of movement is such a meme. Every time I've sold houses in 2nd or 3rd tier markets they've sold and gone into escrow in less than 2 months.

Maybe back when housing wasn't so tight this was the case. That isn't it anymore. Sure you have to queue up a bunch of things like a realtor and a mortgage broker but the benefits of getting equity outweigh the supposed convenience of renting .

[ghaff]

It's also often house vs. apartment. There's absolutely friction associated with moving from a house with its contents to another house than there is to moving from, say, a 1000 sq. ft. apartment to another. It's still a move but it's much less of an undertaking and, as a renter, you also tend to have a mindset that you will be moving.

[skyyler]

I’d love to see some numbers on the percentage of current renters that would prefer to own.

[sgerenser]

Probably the majority at what they think the house should cost. Probably very few at what the monthly payment for a market rate mortgage + downpayment actually costs, based on the recent run-up in home values and interest rates over the past 3-4 years.

E.g. would you prefer to rent the same house at $2000 month, or own at $4000/mo? It might not be this bad in Atlanta but in many areas the rent/buy ratio is that bad now.

[bombcar]

You'd have to correct for so many things - and it's actually quite hard to get down to the reality.

Obviously almost all renters would take a "free and clear" ownership of the same house they're currently renting; that's a six figure freebee.

And many owners will not fully exhibit "buyer's remorse" just because the cost of ownership is so high.

And no home-owner loves facing down the $10-50k repairs that a house can need now and then.

[ghaff]

Yeah. I live in an old house on a little bit of property. It's paid-off but it's still probably something close to $2K/month between property taxes, insurance, utilities/oil, and more or less steady state maintenance--some of which could probably be deferred but...

[skyyler]

>88% of Americans would rather own a home than rent. Specifically, 76% of renters would rather own a home, but only 2% of homeowners would rather rent.

https://www.lendingtree.com/home/mortgage/homeownership-rent...

Pretty clear to me.

[sgerenser]

That’s a completely dumb statistic since it doesn’t talk about the cost. Of course someone would rather have something rather than nothing, if the something cost nothing. In reality, if the “something” cost $1 Million and only saved you $2500/mo, is it actually preferred?

[0_____0]

I know a lot of people who would love to have the money to buy.

Whether they would rather have a house - or - rent but have a down payment's worth of money, I think is a better question

[freitzkriesler2]

It's high , many renters have given up hope they'll ever own.

[gwbas1c]

For awhile, I was friendly with a person who had a lot of material success and was recently retired.

He explained why he preferred renting to me: In the end, it was less hassle for him. All of the "upkeep" was someone else's responsibility. He just wrote a check every month.

(Granted, I prefer owning my own home.)

[Mistletoe]

It’s a massive amount. But what is more sickening is that we are treating a place to live like a market to corner and profitize. Three companies own 19,000 houses! 19,000 houses that aren’t available for people to buy, 19,000 houses that raised the price of all other houses, and 19,000 houses to milk renters for every cent they have like people in the pods in the Matrix.

This isn’t an isolated event either. There are lots and lots of other companies.

https://fortune.com/2024/02/18/did-wall-street-make-housing-...

https://archive.is/jBrme