Vulture investors in down market turn from flipping to renting

Vulture investors are feasting on the depressed United States housing market. Flocks of vulture investors are snapping up distressed properties ripe for the plucking due to depressed prices, record-low interest rates and a strong rental market driven by people who have lost their houses. But in this weak Americas economy, their strategy is changing.When times were good, vulture investors bought and sold homes quickly. Now that times are bad, using properties to generate healthy rental incomes is the preferred approach. Article resource – Vulture investors move from flippers to landlords in down market by Personal Money Store.

Vulture investors scavenge what remains of housing market

Vulture investors get their name because they swoop down and purchase distressed properties on the cheap. CNN reports that places wracked with foreclosures and short sales like Las Vegas, Phoenix and Miami are popular because home prices there have dropped as much as 70 percent. Vulture investors used to be known for flipping often and helping to bid up home prices to unsustainable heights. These days, potential rental profits are looked at as the more stable long-term strategy. Today, vulture investing may serve as more of a stabilizing force for neighborhoods.

Vulture investors roll with the punches

The nature of the Americas housing market today has changed the nature of vulture investing from flipping to renting. HSH.com, an online mortgage resource said the continuously rising home prices that attracted house flippers are long gone. There’s no cash in purchasing low and selling low. And because millions of foreclosed borrowers have to wait years before they can get a home loan, they become the ready tenants for vulture investors purchasing properties for pennies on the dollar.

Cash flow: the vulture investment payoff

By paying in money, rental returns start rolling in right away for vulture investors. CNN uses Las Vegas as a case study, where home prices have plummeted 70 percent when rents have only fallen about 20 percent. Las Vegas vulture investor Glenn Plantone, according to CNN, is getting a 12-to-14 percent net money flow return on investment . The beauty of money flow is that if real estate values continue to fall, the return for the vulture investor holds steady.

Further reading

money.cnn.com

blog.hsh.com