There may well be more elegant, less painful ways to keep houses occupied and roofs over people's heads, but investors buying up foreclosed properties and renting them out will probably play a large role in cycling distressed properties back into the system.

With home prices down more than a third from their peak and the market swamped with foreclosures, large investors are salivating at the opportunity to buy perhaps thousands of homes at deep discounts and fill them with tenants. Nobody has ever tried this on such a large scale, and critics worry these new investors could face big challenges managing large portfolios of dispersed rental houses. typically, landlords tend to be individuals or small firms that own just a handful of homes.

But the new investors believe the rental income can deliver returns well above those offered by treasury securities or stock dividends. at the same time, economists say, they could help areas hardest hit by the housing crash reach a bottom of the market.

Like the natural world, the housing market ecosystem has its own ruthless logic--ugly or beautiful, depending on your perspective. --b.d.s.