The eviction of Maricarmen and the protests over access to housing have returned the expression “vulture background” to the political debate. There is also talk of rentiers, landlords and large holders, terms that usually appear together, although they do not describe exactly the same thing.
The difference is in what each one points out. A vulture fund is identified by its investment strategy, while a rentier obtains income from its assets. Both can participate in the rental market, but they are not equivalent or exclusive categories.
What is a vulture fund
It is known as vulture background to an investor specialized in purchasing debt or distressed assets at discounted prices. You can acquire unpaid loans, debt from companies with financial problems or properties whose situation makes their sale difficult.
The goal is to recover more money than you have paid out. To achieve this, you can negotiate debt collection, restructure a company, sell acquired assets or go to court to claim payment. The profit depends on what you can recover and the costs of the operationso it is not guaranteed.
The name comes from English vulture fund and compares this activity to that of a scavenger bird, because it seeks opportunities in situations of economic deterioration. It is an expression with a critical charge, not a specific legal form that must appear in the name of the entity.
Although in Spain it is frequently used when talking about evictions, Its activity is not limited to housing. It can also focus on debt of companies or States that are experiencing difficulties in paying.
What is a rentier and where does he get his money from?
A rentier He is the one who receives income from his assets. In the real estate field, the most common example is a person who collects rent from one or several homes, although they can also obtain income from other assets or investments.
The term covers very different situations. This may be someone who rents an inherited apartment to supplement their salary, a retiree who adds that income to their pension or a person who lives mainly off their properties. It does not require having a minimum number of homes or having stopped working.
Being the owner of the house in which one lives does not, by that fact alone, make someone a rentier. To talk about real estate income, there must be an income derived from that property, such as that provided by its rental.
What is the difference between a vulture fund and a rentier fund?
The purchase strategy is what characterizes the vulture fund. It looks for distressed assets that it can acquire at a discount and on which it expects to earn a return. Instead, the word rentier explains where a person receives their income, without indicating how they purchased their properties or how much they paid for them.
An individual who has been renting a home for years can be a rentier without ever having purchased unpaid debt. In turn, a fund that acquires properties and rents them carries out a rent-seeking activity, although it can also obtain profits when selling them.
That’s why, Not all real estate funds are vulture funds. Investing in homes to rent does not in itself demonstrate that a strategy of purchasing problematic assets is being followed. Nor does a company that buys apartments automatically become an investment fund.
Why is there also talk of popular rentism?
The expression “popular rentism” It is used to describe the obtaining of real estate income by individuals and families. It expands the debate beyond large funds and focuses on those who use renting as an economic supplement or as their main source of income.
Under this concept, small owners and people with several homes coexist. Their financial situations can be very different, as can their dependence on the money they receive each month or their intention to continue buying properties.
The condition of rentier does not in itself demonstrate abusive behavior. To assess the behavior of an owner you have to examine his actions. Likewise, the fact that the landlord is an individual does not rule out that he may fail to comply with his obligations to the tenant.
What’s the difference with a big fork?
The term large holder does have a definition in the Housing Law. In general, it applies to natural or legal persons who own more than ten urban properties for residential use or a residential constructed area greater than 1,500 square meters. Garages and storage rooms are excluded in this calculation.
In areas with a stressed residential market, the definition can be extended to those who have five or more residential properties within that areawhen the autonomous community motivates it in the corresponding declaration.
An individual can, therefore, be a rentier and a large tenant at the same time, while someone who rents a single home will normally remain below these limits. To determine the obligations of each owner, their specific situation and the applicable regulations matter, not the label they receive in a protest or a political statement.