Are There Investor Clienteles in Rental Housing?
The possible existence of investor clientele groups has received little attention in the real estate finance literature. In this paper we develop a clientele model, which in equilibrium produces a clustering of investors by tax characteristics. Low-tax-bracket investors are concentrated in low-value rental housing that attracts rents which are high in relation to property values. On the other hand, only high-tax-bracket investors will be observed in high-value rental housing, and they charge rents that are low in relation to property values. An empirical model is specified and estimated using a cross section of investors in Australian private rental housing markets. Investor clienteles are detected among property investors, though there is a weak diversification effect indicating that clientele effects may be stronger among single property investors. Copyright 2004 by the American Real Estate and Urban Economics Association
Year of publication: |
2004
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Authors: | Wood, Gavin A. ; Tu, Yong |
Published in: |
Real Estate Economics. - American Real Estate and Urban Economics Association - AREUEA. - Vol. 32.2004, 3, p. 413-436
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Publisher: |
American Real Estate and Urban Economics Association - AREUEA |
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