A recent article in Realty Biz News, Mike Wheatley reported that “The government is investigating new plans to try and limit the number of foreclosures going onto the market in an effort to prevent unsold foreclosed homes damaging values even more – by simply renting them all out instead.” This is the newest of Government concoctions to stabilize real estate markets.
This new Government plan made me wonder, “In recent years, how often have Federal Brainstorms actually worked?” Bank bailouts… did they benefit homeowners or perspective homeowners? How about the various iterations of tax credits? Well, some think they were great, but statistics show that they simply moved people who had already decided to buy into an earlier month, instead of creating more buyers. So, bottom line, tax credits were given with no net improvement to real estate markets. And now “TFPM”… you can call it “THUMP” The Federal Property Management… “THUMP” because like the others, somewhere, somehow we’re gonna get thumped.
I can see it now, The Department of THUMP. And with a multi-billion dollar budget they will manage these properties with expertise-extraordinaire; well surpassing private enterprise. But, the good news: Government jobs. There will be a Secretary of THUMP; every major city will need a THUMP office; and every city will need a THUMP director; and all the profits off those rental properties will not only pay for all of this, but will reduce taxes for all!!! Hooray!!! And if you believe that, you deserve to be THUMPED! By the way, I know a little about property management companies. They work on a very small profit margin and being a property manager is absolutely one of the most difficult tasks of a real estate practitioner. If you think the government can squeeze out more profit than the professionals, well… I have a bridge to sell you!
All that being said still I wondered, “Do the professionals have any thoughts on this government scheme.” So, I conducted a little poll amongst some of the top real estate practitioners in the area. I was interested to discover what they had to say about the most recent government hatch.
- Michael McNiel said, “This is a bad idea. The government doesn’t have the infrastructure to manage rentals or tenants… This would be a move in the wrong direction…”
- Jimi Couture said, “It’ll be three years before they get a system in place anyway…
- Ken Theimmann said, “I can’t see where the government could ever begin to get a program like that off the ground. It’s a horrible idea.
- Lella Hamilton said, “We cannot allow the government to become landlords…the government should keep out of the housing market.”
Others inside the industry said things like,
“Chutspa to the max!”
“I do not trust anyone or anything in this banking industry”
“This sounds like another one of those half baked ideas…”let private enterprise run business… do the management piece, we would be through the bulk of the inventory..selling as much as possible as quickly as possible. If they would focus on ways to improve voter confidence as it relates to the recession that is over… then folks would be more likely to open their wallets and purchase residences or investment property… run the country, and let private enterprise run business…
So, there you have it – the professionals are unanimously filled with confidence! Or not! As hard as it may seem, the best way out for the real estate market is for the Feds to stay out.