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SFR investors move into suburbia and not everyone is pleased

Wall Street backing means buyers with bigger pockets

Ryan Dezember and Laura Kusisto wrote this article in the Wall Street Journal tracking the strategy of single-family rental firms setting sights on the suburbs.

The article is titled, Meet your new landlord: Wall Street, and follows the trouble several potential homeowners face when trying to get onto the property ladder.

Dezember and Kusisto write:

A new breed of homeowners has arrived in this middle-class suburb of Nashville and in many other communities around the country: big investment firms in the business of offering single-family homes for rent. Their appearance has shaken up sales and rental markets and, in some neighborhoods, sparked rent increases.

In short, Wall Street backing means buyers with bigger pockets. And while homeowners are happy to sell at higher prices, the problem is the marginalization of a certain segment of homebuyers. 

In the past, people moved to the suburbs for more space and cheaper homes.

That all began to change during the financial crisis a decade ago. Swaths of suburbia were sold on courthouse steps after millions of Americans defaulted on mortgages. Veteran real-estate investors raced to buy tens of thousands of deeply discounted houses, often sight unseen. The big buyers included investors Thomas Barrack Jr. and Barry Sternlicht — who later merged their rental-home holdings to create Colony Starwood — Blackstone Group LP, the world’s largest private-equity firm, and self-storage magnate B. Wayne Hughes, who is behind American Homes.

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3d rendering of a row of luxury townhouses along a street

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