Morgan Stanley Housing Strategist leaves firm to start Buy-to-Rent Housing Fund

May 27, 2012

Investment collageJust how big is the renting boom getting? It seems that the rental market is an unstoppable force as investors big and small clamor to get their hands on properties in order to take advantage of the rising rents and large demand for units from both consumers still weary of buying a home in the current market to families that need rentals due to their homes being foreclosed.

In the latest news concerning the renting craze, the head of U.S. housing strategy at Morgan Stanley, Oliver Chang, is leaving the firm to begin a new buy-to-rent housing fund.

“Having followed this market for the past several years, I believe it represents one of the most compelling investment opportunities available across all asset classes today,” Chang wrote in his resignation letter to Morgan Stanley.

Chang, one of the few housing strategists remaining on Wall Street, explained that the new firm will include “partners who are some of the most capable and experienced operators and managers of single family rental homes in the business” according to a report by Reuters.

If the head housing strategist from Morgan Stanley sees long-term profits to be made in the rental business, it’s a safe bet to conclude that this uptick will not be a shot in the dark, but a continued avenue of steady income for the foreseeable future.

Already, asset management firm TCW has created the TCW Home Place Partners fund. The fund is designed for wealthy investors to buy distressed properties, thereby contributing to the housing recovery. Beazer Homes USA announced a newly formed real estate investment trust (REIT) called Beazer Pre-Owned Rental Homes, Inc. The REIT is set up to acquire, refurbish and lease recently-constructed, previously-owned single-family homes on a large scale in select markets in the United States.

But is it a good thing for investors to buy up the inventory of foreclosures throughout the country? Many believe it is the best option to get foreclosures off the market.

“We need rental housing,” said Marki Lemons, a Chicago-based short sales expert.

If investors can help create a bottom by purchasing foreclosures and turning them into rentals, then in essence, that’s a good thing. It will be interesting to see how well these investors are as landlords as they purchase more and more distressed properties.

Are investors helping the housing recovery by purchasing foreclosures in bulk? Please leave us your comments.

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.