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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 386.44

-0.2%

Dec 5 4:00 PM EST

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To: TobagoJack who wrote (91442)	6/12/2012 6:01:23 PM
From: carranza2	Read Replies (2) of 218253

People have to live somewhere so they'll pay rent if they can't buy. But whether bundling up the income is a good thing seems a bit more complex than doing mortgage based stuff. The fact that leases are inherently less predictable than mortgages if only because they are short term suggests that there is more risk. The landlord also bears the risk of lower rental rates, maintenance, occupancy, etc. On the other hand, a lot of folks cannot afford homes. And interest rates are low and should remain low for a while. If I understand correctly, the properties are bought, rented and the income stream is securitized for sale to investors. Why not? Mortgages were once a local affair and rentals probably still are. But all that changed. Why can't the rental biz undergo the same transformation? If the plan is for Wall St. to securitize the income stream, one would think that investors would be very wary of anything securitized by WS, especially in the real estate arena. However, a PT Barnum said, there's one born every minute. And if yield is the game in a yield-poor environment, there will surely be more than one born every minute.

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