Gamestop, the market, and rentals

Buying & Selling Real Estate
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Gamestop, the market, and rentals

Nathan FisherBusiness Member
Property Manager · Cleveland, OH · Member since 2020 · 305 posts · 261 votes

I'm keeping tabs on the GME Short Squeeze and the broader affects on the market. My hometown is seeing rising rental property prices, and OOSI is driving a lot of it.

For rental properties, do we see a drop in prices as major investors lose a big chunk of their investments? Or do we see more interest in rentals as a less volatilie investment?

thoughts?

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Taylor L.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
5y

Everything happening right now with GME is still far too short term to impact the real estate market, in my opinion. Hedge funds right now most likely do not see rentals as a potential way to 10x their investment, and I doubt they will until something changes. In shorting GME (or any other stock), they're taking potentially infinite risk for potentially finite gain. They're also not terribly unlikely to receive massive bailouts, but that's another matter.

They're not playing the same game as us Main Street investors, who look to manage risk and potential downside while seeking solid gains. Congress, the Fed, the Treasury, the media, and exchanges aren't going to team up to protect us, we need to do that for ourselves.

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  • Aaron K.
    Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    5y

    Neither, Gamestop is one stock that most large and even moderate sized investors aren't holding at all, let alone in significant enough portions to have an impact on their RE behavior.  The reason for more OOSI is a low interest rate environment, and low housing supply driving up prices and encouraging folks to look outside their local area.

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  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    5y

    Everything happening right now with GME is still far too short term to impact the real estate market, in my opinion. Hedge funds right now most likely do not see rentals as a potential way to 10x their investment, and I doubt they will until something changes. In shorting GME (or any other stock), they're taking potentially infinite risk for potentially finite gain. They're also not terribly unlikely to receive massive bailouts, but that's another matter.

    They're not playing the same game as us Main Street investors, who look to manage risk and potential downside while seeking solid gains. Congress, the Fed, the Treasury, the media, and exchanges aren't going to team up to protect us, we need to do that for ourselves.

    1Reply
  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    5y

    "For rental properties, do we see a drop in prices as major investors lose a big chunk of their investments? Or do we see more interest in rentals as a less volatile investment?"

    Not seeing GME investors as the same group as investment property owners, so no.

    Most people realize you call the broker and sell the stock in <30 seconds when you have a gain.  Most investor know you need to put more work than simply buying and waiting and have to add value to make money.

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