Quote:
Originally Posted by manaboutown
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There have been years when REITs (Real Estate Investment Trusts) have outperformed the market substantially and years when it has underperformed by a long ways. If you don’t know what they will do in the next year, be very careful.
REITs have done a lot of good by buying up hundreds of thousands of marginal homes, fixing them up, and reselling to new buyers or renting to people who want to rent homes or apartments or condos. Granted. However, they also introduced apps with algorithms that make sure they ask the top dollar they can get. When the houses nearby match that, they ask for more. The effect is for rentals and home prices to go up much faster than normal because everyone using these apps are on the same page.
Because REITs control millions of houses and apartments, their effect is huge. Thus, it can be argued that despite the good REITs have done, they are responsible for a large share of the huge rise in housing and rental prices across the country. Many renters have seen increases of $500 a month or more at once, then found that most of the other rental units in town have done the same. Okay, great for investors, but a lot of the homelessness today is due to renters being forced onto the streets because they certainly aren’t getting $500 a month raises to make up the difference.