Response To House Flipping Rate Decline

Warning: This is an rant editorial!

Recently, the Buffalo News published an article [here] about the declining rate of home flips in the Buffalo, NY area.  The article sites stricter regulations for out of area purchasers as well as other "anti-flipping measures" that have been put in place to prevent someone from purchasing cheap real estate and immediately flipping it for a large profit.

Having worked in real estate and property management, I have seen this happen a few times.  There are even some companies and agents who are well known for such practices.  I'm not calling out anyone on their ethics here, but this is a practice that should rightfully be stopped. These are the people who give out of area investors a bad name, usually slumlord.

My problem is the limits the new systems put on out of area investors to buy in Buffalo.  It isn't shocking that there are areas of Buffalo that need rehabilitation work.  This happens in every large city overtime .  Out of area investors bring cash money into the local economy to purchase real estate, as well as building supplies, and rehabilitate it intolive-able space for families, and then either keep the property for their own portfolio or sell it, usually to other investors (either in town or out of town) who hold it in their portfolios.

I can already see the next complaint - the rent money isn't staying in the local economy if an out of area investor owns the property.  In actuality, a good portion of the money DOES stay local.  Out of area investors typically have a property manager who handles the property needs, such as maintenance, which generates income in labor and material sales.  In addition, out of area investors typically reinvest in areas they have success in.  Meaning more real estate sales in Buffalo.

Out of area investors have the capability to breath life back into Buffalo neighborhoods.  There should be some monitoring, to ensure that slumlords don't take advantage of the property markets in the area, but there should not be a wall barring out of area investors from participating in our economy!

Andrew Schultz is a real estate agent and property manager located in the Western New York area.  His articles on real estate investing and property management can be found at www.andrew-schultz.com.