Minneapolis Bank Foreclosures Create a Heat Wave Among Rental Families

The current wave of bank foreclosures in Minneapolis are now creating proliferation of rental families to rent bank foreclosed homes by the thousands. The vast opportunities provided by bank foreclosures to buy cheap housing units in Minneapolis have resulted to several real estate companies allocating huge investments on properties to be used as rental homes.

This is moving in a swift pace and single family homes are now purchased and made available for rental purposes. In recent years, only 8% of the single family units were rented by transients. This rate has ballooned to an overwhelming rate of 18.6$ in a 6 year term brought about by the recent growth in bank foreclosures.

This means that a figure close to 6,400 rental homes are now existing in the state of Minneapolis with only 847 remaining bank foreclosures in listing, 4 in auction and 145 in bankruptcy with the highest price of $274,000 and the lowest at $28,900. There is no doubt that they will be immediately purchased by real estate investors.

These units will again be part of the available homes for rent. A big real estate conglomerate called Dana Investors is only one among the real estate investors who have purchased 40 housing units in North Minneapolis for use as rentals. This company has a target of 300 properties to be bought in the North Minneapolis area where bank foreclosures are tremendously available for sale.

Housing investors are now geared toward real estate investments in lieu of the stock market investment where they see no hope of upsurge as a result of deepening economic crisis. The Minneapolis local government has already expressed an alarm on this kind of rental situation saying that this may not redound to the benefit of the community in general but it can pose as a threat to neighborhood security, relationships and peace and order.

With transients moving from one place to another, neighborhood ties are cut and sanitation is at great risk. The local council is now worried that since rental families are not legitimate owners of the home, there is the tendency to neglect orderliness in the community and proper care in their rented homes.

This could even bring worse scenario when homes are abandoned for non-payment of rentals. Whatever leftovers that they leave will add up to the piles of garbage that will be a burden for collectors. The members of the council also worry on indiscriminate use of the surroundings that can destroy the pride of Minneapolis as an organized and sprawling community of green environment.

The places most affected by the increasing waves of rental homes are Brooklyn Center, Brooklyn Park and St. Paul. The rental families take advantage of the tax credits allowed by the government on rentals for single families. A law was passed in 2001 to give single family rentals a tax break in order to have an equal tax collection with real home owners. This meets the arguments of Realtors that tax collection between the renters and the owners must be equal.

This rental crisis will proliferate as long as the looming are not abated in Minneapolis.