The Permanent Fund is ready to invest $400 million toward the idea that a growing number of people don’t want to own homes.
The Fund’s Trustees have approved an investment in American Homes For Rent, a company that buys packages of single-family homes – including foreclosures – and manages them as rental units. The Permanent Fund would own as much as 80 percent of the company that already owns more than 1,000 houses nationally. The Fund’s Executive Director Mike Burns says the company sees some changing demographic groups that want alternatives to a home investment.
“Another factor due to the economic times, I think is weighing heavily on people, is their need for mobility. Someone doesn’t want to pass up on a job opportunity in Minneapolis because they can’t sell their home in Colorado Springs. So mobility is becoming…it’s a factor,” Burns said.
Burns says the investment is part of the Fund’s Special Opportunities Portfolio — saying the need for the company will exist only for a while.
“It will go away and hopefully we will never do it again — the country will never get in this type of situation again. But for a period of time, we think a window is open and we’d like to see if we could go through that window,” Burns said.
Burns says the properties the company will purchase will mostly be in areas where there are large number of homes on the market now — saying property management needs to work on a large scale to be profitable.
A final contract is under negotiations right now — and Burns says as soon as that is completed, the transaction will be finalized.
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