New Legislation To Force Landlords To Liquidate Portfolios
Several new proposed laws aim to force landlords to sell off their homes, and downsize their portfolios.
Could this produce a tsunami of new deals for wholesalers? What’s driving this new legislative push?
Lawmakers Pushing To Force Landlords To Cash Out
New laws are being proposed to make larger landlords sell off their rental homes across the country.
This includes new legislation and talk of adopting similar measures from Ohio to Texas, Nebraska, North Carolina, New York, California, and Minnesota.
The narrative being used to push these laws focuses on a ‘lack of inventory’, higher housing prices, and institutional investment firms that have been buying up single family homes as rentals.
According to some data 25% of all transactions were investor purchases in 2022, with 21% of homes in places like Atlanta being owned by investors.
Many of these proposed rules seem to want to deter buy and hold investors from acquiring properties, as well as to force large companies to sell off excess amounts of units.
While some make it sound like this only applies to big ‘Wall Street’ institutions, some proposals call for capping landlords at owning as little as 20 properties each.
What’s Driving This Trend?
It’s an election year. So, of course a wide variety of politicians are working to appease voters who are complaining about housing affordability.
In other cases it is no doubt about taxation, and increasing tax revenues.
Then perhaps there is a little dose of distracting the public from the real reasons housing is so expensive right now. Like interest rate hikes, and high inflation, with a weak economy for jobs and wages.
It would be wise to remember that real estate investors came back to save the economy in the wake of 2008. Even though they were disparaged in the media, and blamed for similar monetary policies that caused the Great Recession.
What Will The Outcome Be?
It is probably going to be hard to actually get most of these proposed bills passed. Yet, investors should remain alert to this push.
The fear of this change alone may cause some to get ahead of the curve and liquidate some of their portfolios.
Right now, this is an opportunity for real estate wholesalers to help bigger companies divest of their assets at discounts, and help more families and smaller investors buy properties to hold.
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