SARASOTA - There is a growing trend when it comes to home buying. Large corporations are pushing aside individual buyers with their bags full of cash, all in an effort to gobble up property and then charge people rent.
Local realtor Jessie Cristello says that in recent months, a lot of the interest his company has seen in their listing hasn't been from individuals, but from major corporations.
"The property that I have that's going to be closing next week, they had a cash offer from one of the large companies for $210,000," says Gail Cristello, co-owner of Cristello and Company.
Cristello says their listings aren't the only ones being bought by major corporations." They are purchasing nice, quality homes; $100,00 to a little over $200,000 that will make good quality rentals," added Gail.
According to recent market trends, major companies are buying single family homes that need little to no repair. Gail says the companies then turn around and put them up for rent. "These capital companies realize there's a real need for the good quality rental. Their criteria is a property they can rent for about that one percent. So if they purchase a $200,000 home, they are hoping to get about $2,000 a month rental," said Cristello.
But the news isn't all good. Many of these companies have the financial capability to do cash closings. So it takes less time to finalize the sale, which has made it difficult for individuals looking for a home to compete.
"We only have so much inventory out there, we know there's a shortage of inventory, so yes they are in competition with the buyer," said Gail.
Many are also concerned that with companies buying up the home inventory, this could be the start to the next housing bubble. But Cristello says so far there are no signs of that. "My experience is they're offering fair prices. Their criteria is they are going to rent them and hold them until the market increases, and then at a later time they're going to put these properties back on the market. So I am not seeing that they are damaging our market, l just think that they are creating a real competition for the buyer. "