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Profiting From Real Estate Investments
An Investor Newsletter From HomeVestors Of America, Inc.
By Marcie Geffner / Vol. 3 No. 5
06/04/2008
The Real Value of Real Estate Investors
Pundits and opinion-makers have bemoaned the turmoil in today's U.S. housing markets and gleefully pointed their long fingers of blame at just about everyone who has had any involvement in real estate in recent years. Lenders, mortgage brokers, borrowers, appraisers, real estate agents, government regulators and others have all come in for their share of some very harsh criticism. The invective has been so widespread that even small real estate investors have been caught up in the debate over who's responsible for the current subprime mortgage and foreclosure crises.
But what's been overlooked in this blame game is that small real estate investors make very real and important contributions to the U.S. housing markets and the broader U.S. economy. These contributions far outweigh the negative impact that some unscrupulous house-flippers, who can scarcely be called "investors," may have made to the housing downturn.
The nation's real estate investors have: - increased the supply of affordable rental housing in big cities and small towns,
- created opportunities for first-time home buyers to purchase modest entry-level homes at affordable prices,
- refurbished dilapidated houses and thereby helped to rehabilitate rundown neighborhoods,
- improved the habitability, safety and security of existing homes,
- kept homes that otherwise might have been demolished on the property tax rolls,
- prevented foreclosures by buying houses from sellers who've experienced financial hardship,
- provided work for construction crews, contractors, title agents, mortgage brokers hardware-store clerks and others,
- purchased millions of dollars of building materials, appliances and other home improvement goods, and
- made many other substantive contributions to the national economy and local communities.
The fact is that real estate investors are not a small or insignificant group. Collectively, investors probably number in the hundreds of thousands, though no one has come up with an exact number. Some investors own just one or two rental properties or perhaps a small apartment building while others own hundreds of single-family houses or multiple apartment complexes.
Investors bought approximately 1.4 million homes, or one of every five homes that was purchased, in 2007, according to the National Association of Realtors. Those properties, along with all the others that investors own, shelter millions of individuals and families who need safe, comfortable and affordable rental housing. Those properties also house millions of young people and immigrants who aren't yet able to purchase a home or who may be too mobile in their careers to make a commitment to homeownership.
Without real estate investors, where would all those people live?
The answer -- nowhere -- speaks volumes about the true value of real estate investors.
Copyright 2008, HomeVestors of America, Inc. All rights reserved. No part of this article may be used or reproduced in any manner whatsoever without written permission of the author.
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