If it wasn’t for hoarders I’d be able to afford a house. Shit my parents bought in 2003 and paid 233k, the fucking place is about a million now. They only make like $4 more an hour than they did in 2003, but because they were able to get in before it got stupid they are set.
Like shit it’s an entire house and they pay what I’d be paying to rent a two bedroom apartment.
Well due to the massive increase in end of life costs in the last decade his parents will have to sell to house in their last few year and the inheritance will vanish. Don’t worry we’ll all end up in the same place.
Eh, fuck off guys. It’s his own place that he invested in and provides. People are allowed to make some profit for services they provide. No one said he’s priced it unfairly or takes advantage. Jesus Christ you people are unreal.
It’s about the audacity to even state that last question.
I’m in a similar boat as that guy, I rent out my apartment while living on the other side of the pond. My only reason for not selling but renting it instead is that I was born into that apartment and plan on living there when senescence starts taking a grip on my body. I basically rent it out long term for utilities+upkeep cost and haven’t raised rent in five years despite some crazy inflation going on in the country.
But never even thought of asking this shit ass stupid question. Sure, not everyone is meant to own property, especially seeing the sorry state the cleanliness of my apartment is in between the renters the last eight years. But I’m not delusional to think that there was no privilege involved in me owning that apartment. Unlike what that piece of shit posits.
Imagine thinking this is an actual rebuttal. They can’t afford buy this house whether or not she owns it. If they could, they’d buy it or one like it. They can afford to lease it because apparently rent there is lower than mortgage, I’ve lived in places like that, 10,000 a month to buy over 22 years but 1300 a month rent. You nitwits want to blame people doing ok for themselves when maybe look in the mirror.
Buying the house would be a lot cheaper if landlord weren’t hoarding properties, then you might have a 1300 a month mortgage instead of a 1300 a month rent
All y’all need to sit down with a mortgage calculator, a rent index, and do this in a few cities. None of you seem to have an idea what’s really happening all over, which does admittedly vary. Rent being less than the mortgage is a very, very common thing, even now.
Rent payments are not less than a mortgage payment, that’s the problem. Normal people are struggling to reach the 20% down payment in this economy. Otherwise they would buy. Just because you personally found something with rent lower than a 20-year mortgage doesn’t mean other people can.
Seems like there’s a lack of understanding in this thread.
Someone who owns a duplex and rents half is not a problem. My barber, who moved to be closer to sick, aging parents, but did not sell their house in Asheville, because they want to retire there and won’t be able to afford that if they sell now, is not a problem.
Corporations are the problem. They’re buying up hundreds of thousands of properties, and why not? To a greedy corporation that only cares about money, it makes sense. If you sell a house, you make money once. If you rent a house, you have a subscription model and a revenue stream. Adobe did it with Photoshop. HP wants to do it with printers. Greedy Bastard Inc. wants to do it with housing.
Legislate big business out of housing. It’s the only way to fix it.
To be fair people like Mr Barber often are very supportive of zoning that prevents enough housing to be built and any measure which makes their property appreciate much faster than inflation is sufficient to eventually completely destroy the useful housing market for anyone who doesn’t own.
It’s not a lack of understanding, it’s just that you’re omitting another huge group that is the other half of the corporation problem and also involves private landlords.
The person who owns a duplex and lives in one of the two units is not a problem. A business owner with a taxpayer above their storefront is not a problem.
But the large group of private landlords that buy up single family homes with the sole intention of turning them into forever-rentals are a huge problem and a much larger group than the niche private landlords you mentioned. These people don’t get a pass for doing the exact same things the corporations are doing but on a smaller scale. These people live in their own single family homes, which are financed by denying other people the chance to buy their own by removing them from the housing market and turning them into price-gauging forever-rentals.
You are absolutely right that corporations buying up all of the properties are the biggest problem, but I think the reason most people in this thread are irritated with the landlord from the OP is because they make it sound like they are doing the world a favor by leasing their own building.
Even if they aren’t directly profiting off of the rent they collect, like say for example they are simply breaking even each month, they are still indirectly profiting by having an affordable place to return to whenever they decide they want to move back to the UK again. “Where would people live if not for me?” is kind of a ridiculous claim, because either the tenant would take over ownership of the property or another investor would purchase the property and take over the existing lease if that weren’t possible.
Where the fuck are you seeing this argument take place? How do you know this isn’t a fair landlord? Why are they not allowed some profit for a service they provide?
Tbh this type of landlord isn’t really the problem. It is the people who intentionally buy up masses amounts of housing just to rent out. Middle class people who have a heart using it for their own security is the ideal landlord situation.
This was my mom. It was the house she grew up in, not worth much. She ended up renting to a bunch of people over the years, way below market, and eventually let a family living there save up enough for a down payment to afford a loan to buy it from her. They’re still friends with them and the new owners take good care of the place. My parents are much happier knowing it’s being used well vs being landlords.
Can we stop shitting on landlords and start shitting on politicians that write the laws? Yeah landlords suck, but if it’s all legal they are not really to blame. If parking in a handicapped spot was legal for everyone the spots would be used all the time.
If parking in handicapped spots was legal, that wouldn’t make you less of an asshole for taking the spot, for the same reason it doesn’t excuse landlords. I have no idea how you’ve come to equate laws with morality but breaking the law doesn’t make you an asshole. Being an asshole does.
In the end people still vote for these people, some states have much more protection for renters than other states. I live in a country that has a lot of laws to protect renters.
There’s a reason why the USA still doesn’t have affordable healthcare but almost all other first world countries do have it.
So Americans just decided they want worse standards of care and lower overall happiness? Like how the French collectively decided to raise the retirement age, right?
My family owns a few rental properties. It was the mechanism that allowed my grandfather who grew up in 1930s Mississippi working the same land his slave grandparents did to escape poverty and retire pretty well off. He moved to Chicago, worked as a garbage man, bought a 3 flat and lived in one unit and rented the other two. Eventually he invested his money in more properties and and had his lawyer buy his house in the racist suburb of Oak Park so my mother could grow up in relative comfort.
The company was never ment to extract unlimited profit, we actually had many unprofitable years due to demographics changes, recessions, maintenance, and poor tenants causing damage ( who flushes weave down the drain?). But in aggregate it’s made enough to give stability, because being a landlord is always our side job.
During the pandemic my mother worked with all the tenants who lost their jobs or had limited or no income. Since none of our properties have a mortgage, she reduced rent to just enough to cover the insane Illinois property taxes and the shared utilities for the people that could pay. When the boiler went out she picked up a few extra nursing shifts with covid pay to cover it. When things returned to the new normal or when tenants found new work, she just had them resume normal rent without needing to pay any back rent in their lease.
You’d think we would be rewarded for doing the right thing and treating people with basic human decency, but no. When we applied for covid assistance, the money was gone. We then started to receive building violations for one of our properties is an up and coming area. The funny thing about these violations was that they were for items repairs 10 years earlier, and also for things we received city and used city grants and contracts to fix. Now we are currently in a legal battle with the city where they want us to take a $900k loan to fully renovated the building or have the city seize the property because it’s a “crime den” in their words. Like how, we screen everyone, rent mostly to old people and single mothers, and have camera in public areas and around the buildings. We even routinely provide footage to the police when they request it, even though that means we have to buy a new DVR since we have yet to have one returned.
But ever since covid and this inspection bull, we get daily calls letters, emails from corporations expressing their interest in buying our not for sale property.
Like how, we screen everyone, rent mostly to old people and single mothers, and have camera in public areas and around the buildings.
ever since covid and this inspection bull, we get daily calls letters, emails from corporations expressing their interest in buying our not for sale property.
That’s why. Someone’s asking a “friend” to lean on you and make you sell so that a corporate landlord can consolidate more of the rental market.
I’ll be honest, that building sounds like a piece of crap. Inspections are easy to satisfy if you keep the building up. First of all, not many building inspectors take bribes (even in Chicago). Second of all, the updates they ask for aren’t crazy. Third of all, if you think the building inspector was bribed, discretely ask them about it as if you also want to bribe them. You can find out.
It sounds like you have some issues that they let you slide on before. Maybe the old building inspector retired during Covid and now you have somebody who’ll actually enforce the rules. You have an old ass building with a bunch of old ladies in it. That’s exactly what a run down building is like.
The funny thing is that we have to be present during inspections because we have to allow them into utility areas and different units along with giving tenants notice that people will enter into their homes. We passed 2019’s inspection and was working on getting leed grant to help finish some improvement needed to qualify to accept section 8 renters since we just replaced all the windows and installed central air conditioning in each unit. The violations were for things corrected across almost 20 years of inspections. There was no inspection that led to our violations.
Probably not. They would be renting somewhere else. Because if they could afford to buy a piece of property in the first place, they would.
Yeah, landlords make a profit. But, they’re also offering a service. Sure most are fucking shit, but that doesn’t mean landlords in general should not be extracting a profit. If you want to maintain your own piece of property yourself, then go buy one.
Agreed! If you want to maintain your own piece of property you need to OUT BID YOUR LANDLORD who is trying to find their THIRD or FOURTH rental property!
Not to mention we often have such an imbalance between renters and landlords, in either direction.
Either you have state law that heavily favors the landlords with no protections for renters against exorbitant rent increases, no enforcement of the land lord’s duty to the property on the lease, and no recourse for renters.
Or you have state law that heavily favors the renters, with no easy way to evict problem tenants, caps on rent increases that don’t allow the landlord properly account for risk, and no recourse against tenants who don’t pay or cause damage to the property.
Most people would buy if they could. But too many are forced to rent because of those landlords cutting the queue and paying through their nose because to them it is an investment and not a home.
But that’s not what’s happening in this circumstance- it’s literally just her old apartment. If she sold it and did want to move back, then she’d be competing with the landlords to buy another one. Or better yet- if she sold it, it could also be bought by a DIFFERENT landlord who might charge more.
I mostly agree with this. I guess the argument against this is that if all rent-seekers just sold their properties instead of treating them as an income stream, then theoretically there would be more properties on the market and properties would be more affordable for those who want to buy.
To me, individuals choosing to sell instead of rent-seek would have such a small impact on the market, and those properties would just be bought by corporations that will rent-seek.
It seems clear to me that if we really want to fix things, we should ban corporations from buying single family homes instead of attacking working class people who are trying to build a passive income stream.
This part is my problem. Some people don’t want, or aren’t cut out to maintain a property of their own, so renting is theoretically a good deal for them. And the person doing the work of maintaining a property deserves to be compensated for that work.
But wtf is a passive income steam? It sounds like the landlord is hiring someone else to actually do the work, and then charging the renter enough to cover the property manager and profit the landlord. In which case, the landlord is doing exactly nothing to earn that money.
Yes, a passive income stream means that I would be able to live off the investments that I worked my ass off for when I was young and healthy. How else does someone ever retire without some sort of passive income stream? Are you saying everyone should have to work until the day they die?
And yes, I’d have to pay people to maintain the properties I’m renting out, as the law in my state requires. Because I’ll be old and retired and may not be able to do it myself.
Having passive income and being able to retire is a big part of the American dream for me. I can’t count on Social Security and Medicare to even exist with the way things are going. How else would I retire if I don’t have investments that make money? Property is part of that, stocks that pay dividends are another part of that.
I guess if you’re so radical that you don’t think any investment should ever have a return to the investor, then your position makes sense.
Should our entire government and economy be geared towards profiting off investments at the expense of everything else? Definitely not.
Should people be able to retire on investments that they busted their asses for while they were young and healthy? Absolutely.
Should corporations be able to invest in residential homes and rent-seek? No, I believe this can be harmful and hurt individuals, but that doesn’t mean that we should try to prevent individuals from investing in real estate.
This was a very hyperbolic response, so let’s clarify a few things:
Not all investments are equal, and saying some thing should be ineligible to invest in for profit-seeking is not at all the same as saying Death to Capitalism, as you seem to imply. My imaginary friend is starting a landscaping business & is asking for an initial investment in exchange for a return of profits. That is not the same as investing in a fossil fuel company that’s directly contributing to the destruction of the planet. That is not the same as investing in a sanctioned Russian company responsible for war crimes. That is not the same as seeking to maximize profit off of a resource people need to survive.
As I said, I’m not advocating for all investments to be abolished. But digging into retirees a little more- you’re right, many retirees can’t work anymore. Also, many retirees don’t have enough resources to simply passively profit off of owning capital. Investing doesn’t help those people, does it? In fact the opposite- capital-owners seeking to maximize profit drive up the price of essential goods that retirees need to live. Like rent! Overall our government should be helping all retirees live to a base standard level of care.
Not all methods of profiting from an investment are moral or should be allowed. Price gouging is a thing. A hurricane is approaching the coast, and evacuees need to leave, or they will die. Gas stations jack up the price of fuel to maximize profit regardless of the harm it will do to the people. That should not be allowed. Right now, there is a housing crisis. Investors should not be allowed to maximize profit at the cost of harming entire generations of Americans.
It sounds like the landlord is hiring someone else to actually do the work, and then charging the renter enough to cover the property manager and profit the landlord. In which case, the landlord is doing exactly nothing to earn that money.
They bought the property. That’s all they have to do. “Sorry, but all you’ve done is build up enough of a credit score, income, and down payment to get a loan for this property. You’re not living in the house or maintaining it, so why do you even get to own it. Please turn yourself into a charity and operate as a not for profit.”
If they want to barely profit off the property by leveraging a property management business, who the fuck cares.
If rent is too high, then the government should put controls in place. But this idea that property owners should be operating as charities is absurd.
I’m not saying they should run it as a charity, I’m saying they shouldn’t be allowed to own it passively. You say “build a credit score, income, and down payment” as if those things aren’t handed to the upper class on a silver platter. If a trust fund baby decides to buy a house for “passive income” they will have done absolutely ZERO work for that money.
The lease goes with the property, there’s no reason for you to leave, unless the new owner is planning on occupying the property. You could ruin the deal if he tries to evict, especially since you have a lease until September. I would ask him to pay you to cover the costs of moving and securing new housing. If he doesn’t, then he can wait until September/October.
This is a situation where the landlord doesn’t want you to know it, but the power is in *your *hands. Legally, your lease runs until September no matter who owns the building, but the landlord can get a better price for an unencumbered property, so you can ask (basically) “what’s it worth to you for me to be out before my lease is up?” and negotiate something that will offset at least some of the pain of having to find a new place at a higher cost.
Yeah, same thing happened to us. Landlord said he had at least 5 years. After 2 he starts grumbling that our rent is too low but he can’t increase it to the level he wants to (BC rent control). We say, oh that’s too bad.
After 3 years he decides he’s done being a landlord and wants to sell the apartment and tells us he’s going to kick us out and sell the place. We fight. BC has a policy that the landlord must actually live in the unit for at least 6 months in order to evict a current tenant and he’s shown us he doesn’t intend to do so.
There is more fighting, he finally consults a lawyer (he didn’t seem to be aware of the law). He finally understands what he must do to evict us and we started losing ground. End of story we negotiated him for extra money, getting evicted on the same date and decided it was better than walking away empty handed.
Make them pay you to leave early. Cash for keys. It’s probably worth a couple thousand depending on the price they’re getting. “Hey, we have a signed lease, so it is mine until September. But I’ll let you pay me to leave early.”
Your landlord is an asshole, but the bigger problem is your laws. In the Netherlands for example if your landlord doesn’t give you a very specific short term contract (where it’s very clear it’s short term renting) the landlord can’t kick you out as long as you pay the rent (and even if you stop paying it takes months before a judge kicks you out).
My friend rented this place that the owner just couldn’t sell during the financial crisis. A decade later housing prices where high again. The landlord really wanted him gone but had zero legal ground to do so. So when my friend told him he was thinking of moving the landlord offered all sort of help to make him go (like paying for a moving company etc).
You’re not wrong, but the fact is that it’s actually really hard for tenants to even enforce existing laws, and shitty landlords know it. You need to pay to file your lawsuit, you need to know the law down pat, you really need a lawyer (that you often can’t afford because they’re all on retainer for the big landlords), and even if you ask the local Department of Health and Human Services for assistance or whatever, you’ll be on a waiting list for MONTHS because there’s probably also a hundred and a half other people who are trying to do the same thing against their shitty landlord. The people that this system benefits know how much of a pain it is, know how long you’ll realistically take to get anything rolling, and know that if they give you a short enough timespan, you’re going to shrug and say “well OK then” more often than not.
This is why and how assholes steal security deposits. “Oh you’re leaving the state and would have to travel back to participate in small claims court? Get fucked.”
I guess that’s the difference, if a landlord wants to kick you out here, they have to try to physically force you and you just call the police.
If a landlord would go into your house and remove your stuff you would immediately call the police. A landlord just can’t do that here and would be treated like a burglar would (by the police).
The laws are bad enough but it’s the enforcement that’s the real problem.
My brother was on the opposite side of this where a tenant refused to pay rent and refused to leave. However the only avenue for enforcement is a lawsuit or several. Not only are you out legal costs, it it can be dragged out months. It doesn’t matter if you’re in the right or have the law on your side, if you can’t afford your rights. He found it much faster and cheaper to “bribe” them to leave, “I’ll give you $500 to move out before the end of the month”. You do have to swallow your pride and any righteousness, though
I’d feel the same in this story: sure I have a contract, but is it worth my time, costs, and hassle to stand on my rights? Who needs that stress? However, I also agree with those who suggest bargaining with the landlord. They likely know they can’t win and would rather not pay their lawyers to drag it out, nor risk their sale, so there’s a good chance you could get moving costs or something from them
I’m in this situation and I’m renting out my house while working overseas, where I am living in a rental property. Just because the market has been perverted by capital doesn’t mean there aren’t legit purposes for a rental market.
I’ve read a lot about labor theory of value. I think it’s wrong though. Value is 100% an individual decision, there is no inherent value, in my opinion. And none of Marx’s theories are “scientific”. And before someone says it, maybe Adam Smith argued LTV, I don’t know, I’ve never read any Adam Smith- doesn’t change that I disagree with LTV
Thanks for the link, I didn’t know the history behind it- I just remember vaguely someone chastising someone for calling LTV Marxist and saying that Adam Smith believed in it.
Most people wouldn’t labor 40+ hours a week for the wages they are getting if they had alternative methods of obtaining food, healthcare, and housing. There is no real-world “free exchange.” You have to deliberately ignore the coercive part to pretend it doesn’t exist, because it is obvious. People need to participate in the economy to survive.
I agree it is coercive, but not because of a need for food or shelter. That need is the natural state of humanity, there is no one imposing that need on you. There is no one coercing. But I absolutely agree there are plenty of other coercive factors.
Would you accept if I say “exploitative” instead of “coercive?” I just think for the economic model to price things efficiently, inelastic goods like being alive need to be external to the model. I disagree with describing what we have as a willing exchange.
There definitely can be exploitative factors, just like coercive factors, and housing for example to an extent is exploitative, as in exploited by politicians. But I don’t think food sales are really exploitative.
Well yes and no. Profit is a byproduct of profitable labor, not all labor. If you’re hunting for food for energy, but don’t catch anything (or catch less than you expended), that was labor but it was not profitable. Which is a criticism I didn’t really point out before either, but my argument was more to say when there is free exchange of labor it is much more often profitable.
Exactly. Profit actually muddies intrinsic value added since the main driver is purely financial, not actual irl. And you can make a (steady) profit on/with things that don’t add value.
Depends on the case, but for an average house the cost of building one. How the location affects pricing wouldn’t change (land/space is still limited & some places offer things that others dont).
Its just that without rent invectives more houses would again be privately owned simply because less investment capital would bother with it & push the sectors profitability up.
Ah I see, yeah I would disagree there is such a thing as intrinsic value.
Its just that without rent invectives more houses would again be privately owned simply because less investment capital would bother with it
I don’t know if I agree with that, because of current governments goals of keeping house prices ever rising, land, even empty, would be useful for risk management. It also may lead to that land being used for very short term housing, aka AirBnB. It could also lead to psuedorent type arrangements where banks offer loans with much lower downpayments, but with extremely long terms.
What government has an interest in rising housing prices? Isn’t their job the opposite of that usually? Im not familiar with that.
And regulators/government should prohibit such predatory practises as long loans (no central bank would even allow that atm anyway, not under Basel). Basically my point is that housing, healthcare, public infrastructure, etc should be non-profit imo (so, no dividends/profit payouts, only for r&d or lowering price points and profit sharing to clients).
What government has an interest in rising housing prices? Isn’t their job the opposite of that usually? Im not familiar with that.
A government who for decades has encouraged home ownership as the safest way of building wealth. A government who a massive number od their constituents are home owners.
And regulators/government should prohibit such predatory practises
Are they predatory? How else can someone live if they can’t afford a down payment and can’t rent?
Basically my point is that housing, healthcare, public infrastructure, etc should be non-profit imo (so, no dividends/profit payouts, only for r&d or lowering price points and profit sharing to clients).
Oh, yeah, politicians working for themselves, that’s the exact same reason why taxes on rent are usually kinda low/treated specially.
Yes, really long loans are predatory or if you want to look at it from a different perspective, a result of a non-functioning system. Financial obligations tax mental health, trap people, make enormous cumulated profits on capital without any work & negligible risk.
Central banks restrict max durations on mortgages/loans as is (also like what clients minimal disposable income after loan payments must be each month, age, max ratio of loan to property value, etc). And yes, if nothing else changes, that is bad for young people trying to buy a house, start a family, central banks acknowledge that, but their job is monetary policy/stability, not social policies - the government is the one not doing their job.
I agree, however, a good landlord who maintains their property and promptly resolves issues will have to invest an element of time and money into the process.
a good landlord [is one] who maintains their property
That job exists - they are called maintenance workers: plumbers, electricians, roofers, handymen…
What makes a landlord a landlord - and not a handyman - is the ownership of property and extraction of rent for its use. It is definitionally not the labor involved in maintaining it.
If landlords want to be paid for maintaining properties they can get jobs as maintenance workers.
The value of a landlord in theory is that they rent at a rate lower than what the mortgage would be, since the renter isn’t going to own the property at the end of it. And in turn the renter is wanting short term accommodation. The issue is various conditions have led to home prices always going up.
Landlord is the role of owner, not maintainer/manager of the property. Sure, they can be the same sometimes (even then most of the actual work gets outsourced to professionals), but anyone can enlist the help of a real estate manager. We usually tend to call them janitors.
Also there are huge open funds specialising in real estate (for rent revenue, for dev/resell potential, or both) that have like a 100 property managers that just need to keep their tenants happy. What that actually means is that investors pool their moneys into a fund with fund managers that buys real estate, finds tenants that wound pay a higher rent under certain conditions (eg I want a huge concert hall in the center of our office complex), fund has the capital to make it happen & evicts the current tenants (unless they can match the rent of the place with a concert hall but without actually having it).
Ofc, stuff that you can’t really live without (or be considered poor without) cannot be market priced/for profit because the only thing stopping soaring prices would be a revolution/revolt … and we were pretty pacified throughout our upbringing. Even silly/obvious things - like people automatically condemning (financially poor) looters of megacorps with unimaginable private profits.
The person in the tweet doesn’t claim to be making a profit at all. She’s basically saying she isn’t going to sell the apartment, so if she didn’t rent it out, then it would just sit empty.
In her case, so she has a place to move back to if she comes back. Although I have a friend who has a few properties that he rents out basically at cost (mortgage, taxes, insurance, maintenance) and has them as an investment properties.
Loan interest payments are absolutely not something that should be converted by rent - you just take someones labour to pay for something in order for you to eventually own it.
Same with taxes - both on rent profit and real estate itself.
Maintenance, insurance, electricity, water, etc tenants cover, bcs that is the thing they are using & costing landlords. And those things are absolutely not 6%~12% (as average re yield) of the real estate price. Its just profit from labor transferred to non-productive factors.
So people should just pay a tiny fraction of the cost of home ownership to rent somewhere? If that were the case, only the absolutely most wealthy people could afford to own and rent places out. It wouldn’t make sense for anyone else to buy it, and those ultra wealthy would be the only ones profiting.
And higher rents result in higher real estate prices. With lower rents housing prices would fall to their intrinsic fair value.
Also a lot of people invest in real estate without external financing (unless it’s way too cheap & an opportunity - a few years back b2b loans were at 1% vs 4+% now). Investment companies on the other hand ofc optimise cost of financing with target yields and leverage.
ultra wealthy would be the only ones profiting
I don’t understand. They do that now, at a much larger scale, I work for them :D. And with low rents everyone would benefit more on average.
For all but the ultra wealthy, it absolutely is. Which is my point.
Im decently wealthy, but clearly still working class. As is pretty much everyone else I know around me. Plenty of them have 1 to a few rental properties. I know one guy who just basically covers his costs with rent, and uses them as investments. But all the others use it as a stream of income. So the claim that only the ultra wealthy profit from it makes no sense, and if you think the people you work for are the only ones in the market, then your perspective is terribly inadequate.
My in laws are also sitting on a property that they could rent out for income, and while they are well off, they are not ultra wealthy either.
I didn’t say that. Most of the middle class wealth arose from real estate, however Im saying that the “ultra rich” benefit a lot more from real estate than people you describe. But building several housing complex for 10s of millions each absolutely nets you more that a studio apparent in some basement.
Also, what Im saying overall here, regular people would get more real estate in it were not so profitable. Government housing projects that lower market rents are then terrible for … ‘decently wealthy’, so none of that?
Also, its not that the usual case is that a landlords would be less ‘wealthy’ than the tenants they have. So however you look at it, it’s a market where your goal is to up the rent as much as possible (“it wasn’t me, it’s the market, tho my costs didn’t even change, lul”) over people less fortunate than you that usually don’t have another choice.
And no, I don’t understand how financial expenses would be cost of ownership. Sure, you can’t do it or it doesn’t make sense not to take a loan, but that’s financial stuff, not ownership stuff, the same way as you job isn’t the cost of ownership for a house. It might be in your case, ofc, but there are steps in between.
Sure seemed like you did when you responded to my claim that they would be the only one profiting from it, by saying that is happening now.
Also, what Im saying overall here, regular people would get more real estate in it were not so profitable.
Maybe, but the issue is that if you couldn’t use your financing in your calculation on how much rent to charge, only those who can outright buy properties (i.e. the ultrawealthy) would be the ones who could profit from it.
but that’s financial stuff, not ownership stuff
But if you have to finance to own, then it is part of the cost. I don’t possibly see how you can argue again this. One could easily decouple the maintenance and taxes from it in the same exact way and say you have to work for the money to pay these things, so it doesn’t count.
I don’t think we are following each others thoughts very well here.
You (eventually) cannot have property without maintaining it and paying taxes on it. You can have property without financial leverage or even without buying it.
Im not saying that loan interests and even loan nominal repayments, maintenance, taxes, etc dont get forwarded to tenants, Im saying that only happens because landlords just can do that because are usually in a privileged position to tenants.
I didn’t understand your claim why only rich would profit from real estate if real estate would be cheaper (bcs of lower rents/yields). In that case everyone could buy or rent.
And I dont understand how profiting only from the less fortunate wouldn’t only lead to more inequality and more extreme conditions on the same market there already are huge issues atm (can’t buy a house without a 30y loan, wtf?).
Taxes, maintenance, a management company but probably most of all the interest on the insanely large loan you took out to get it. We “bought” a house with a 30 year loan and if we were to rent it out right now at market rate, there would be no profit. We would probably take a small loss other than the opportunity to hold the property hoping that the price of housing continues to rise. It hasn’t risen since we bought the house a couple of years ago. If you’re old enough to remember 2008, then you also know that it doesn’t always go up. Sometimes it goes down pretty dramatically and you’re left holding the bag.
If the house sits empty between tenants, those costs don’t go away. So for me, in my one bathroom house, that would be $2,400 a month (not including maintenance.) Where is that money gonna come from? I don’t have it because I’m paying rent somewhere else to try and make more money to dig my way out of this hole in this hypothetical situation.
So why not sell? To sell it, we have to pay 6% to real estate agents. If we actually owned the house, not just a massive soul-crushing loan, fine. But we don’t. So that 6% is a SHITLOAD of money when you borrowed all of it besides the 15% down payment that was two people’s life savings plus begging for more from relatives. So selling means half your combined life savings and the money you begged from relatives, poof gone.
Most people have a mortgage like this and amortized interest rates mean that in the beginning, 90% of the money you give the mortgage company goes straight to interest because you pay off 30 year’s worth of interest up front so that they’re sure they get their profit (and because paying the full 5% interest on a note that big every year would be impossible for most people.)
People who bought recently, have a mortgage and a single home that they rent out are not making any profit in areas with expensive housing. It’s not like houses are cheap to “buy” in the first place. They get you good.
Why buy at all then? Because I don’t like landlords telling me what I can and can’t do. So much so that I gambled it all on “buying” a place.
Loan interest payments are absolutely not something that should be converted by rent - you just take someones labour to pay for something in order for you to eventually own it.
Regarding the intentionally low liquidity market - that bullshit is by design. The government to allow (much less mandate) real estate agents to not get payed in fixed amounts is just grotesque. They dont provide any service and are not really responsible for anything.
I think we have a cap at 2% (but EU is slowly working towards banning any financial advice where the adviser gets payed in % of something because then it’s in their interest for the price to go up). But most importantly, I can draft the contract myself (or ask a lawyer to do it for a minimal fixed fee if Im too lazy to look online for examples) & pay nothing to real estate agents. I can’t imagine paying an extra 6%, that shit is formed basically as taxes, but go directly to private entities instead.
What in saying is that actual landlords and real estate agents have an interest in hiking prices for something they have extra but its a necessity for everyone.
Wait, why would people buy houses with 30y loans just to rent them?
“Loan interest payments are absolutely not something that should be covered by rent - you just take someone’s labor and to pay for something in order for you to eventually own it.”
Where will the money come from then? I’m not rich, I can’t afford to lose money every month renting out a place for less than it costs me. I also can’t afford to sell it. The concept sounds great to me though, I shouldn’t have to pay any interest just for a place to live. Hell, I shouldn’t have to pay anything at all. Help me go burn down the mortgage company and tax office and then I can let people live there for free if I have to leave town for a few years. Everyone wins. Except the people with money to lend of course, so you’ll need to have cash to buy a house, which means only the rich will have houses.
“Wait, why would people buy houses with 30y loans just to rent them?”
Because you didn’t buy it to rent it, you bought it to live in, but your situation changed. You need to move for work or family and that move may be temporary. You can’t sell your house without taking a massive loss and anyway, you’ll probably just get laid off again in the city you moved to to find work. Or maybe the aging parent you left to care for finally died and you want to come home, maybe you took a 2 year gig in another country to try and make more money. Maybe you dream of coming home to retire there after you spent all your good years working somewhere shitty.
The alternative is to sell your house and buy another one in the new place which can be financially disastrous (ask me how I fucking know) or sell and rent, knowing that you might well never be able to afford another house due to interest rates rising.
I’m not selling my only home and taking a massive financial loss to help reduce housing prices by 0.00001%. Fuck that.
For the record I’ve never rented my house out because I dislike the idea of renters as much as I dislike landlords. But in retrospect, I wish I had done exactly what we’re talking about in this thread because then I could at least go home, even if the renters trashed the place, at least I’d have a place. Now I can’t go home, I’m just trapped in this new place.
Some people on Lemmy seem to be under the impression that everyone who “owns” a home is a French Duke lounging around in Ibiza eating soft cheeses and drinking fine wine with your rent money. It’s weird and I don’t understand it because if you’ve ever tried to buy a house and used the “what will my monthly payment be” calculator, then you would know that being a landlord is not profitable unless you have a lot of cash, a lot of houses and/or decades of time.
I would actually line more people to be ready to go “burn things down”, literally is optional, figuratively is a must.
Things that are in abundance but can be made scarce by hoarding (relatively speaking, and as a movement that you as one person can’t go against so you rent your place out as others that can in fact do) annoy me. So yes, burn the system down, we can do things (net) better. And lenders in regulated markets are not even a big part of the problem (outside of general financial crisis of various reasons).
And no, absolutely this is not a system you fight as an individual not participating in it somehow. These are important, big, and complicated reforms that will get a lot of push back from lobbies, but ultimately need the support of majority.
And also ‘can’t afford to sell’ imho shouldn’t be a thing in equal society, it’s such a reduction on movement and options for a lot of people that don’t get advantages as others do for no particular reason in their power.
About the French Duke (lul), but for real - a huge part of gen-z (not supported by parents or a fund) have given up on ever owning a house (much more so alpha gen I assume). And that is a huge mental fatigue owners don’t have or easily forget if they had it.
Also, best wishes with things, lets hope it changes for the better soon (even if the ‘better’ isn’t a better system but just better pay … which afaik is the only real solution to getting some capital, investing, play the dirty game, get ahead of others that can’t participate etc).
“I would actually like more people to be ready to go “burn things down”, literally is optional, figuratively is a must.”
That’s one thing we agree on for sure! The way things are trending is not sustainable and people will only put up with so much, so things will have to change at some point.
Thanks for letting me vent haha. I hope you get your own money pit and plant some nice trees in the yard someday.
Haha, literally plant seeds or like just feed seeds to chickens or something is the luxury dream of mine, increasingly so.
Quite a lot of trends in a lot of aspects affecting life quality (human & nature) are horrifying. And to think we are way past the point of French revolution in wealth inequality, and Russian as well. 8h shifts 5 days a week, commute, lack of options, financial obligations and necessary costs, etc really keep people down & from protesting. I like that unions are striking, things must change somehow.
The way the real estate market is currently set up, a property sitting empty still generates profit as a financial asset. This is the major issue with rentier capitalism, not your average middle class homeowner with an extra property for rent.
Safe is the point. At least in the US, property taxes are substantially cheaper than anything you could do with liquidity, plus you can tap into the value partially or wholly without actually incuring much risk, or even taking that long. Owning property allows you to have collateral for loans and other financial investments which have larger yields, but require something up front. It is entirely possible to get a loan against a house for an investment, then pay it off with the yield of a previous investment so you don’t have interest accruing. As long as you are savvy and intelligent with the investments, it is reasonably sustainable, especially if you are profiting off the property anyway. Who cares about an extra loan payment if you aren’t the one paying it.
Who cares about an extra loan payment if you aren’t the one paying it.
This all stems from someone claiming an empty property still generated profit. You seem to be arguing that if someone else is paying your mortgage (i.e. a renter) then you can profit by borrowing against the equity in the property. I agree with you, but I don’t see the sense in borrowing against an empty place as you are just giving some of your profits to the lender.
The benefit of the ability to borrow against it comes from being able to take part in other investment opportunities. Someone has a company they are starting, you can take a mortgage to invest in it and a year later potentially pay off the mortgage (depending on the size) and it can be empty or not. There are other financial vehicles that have a similar pattern. Even taking a mortgage on a property to take advantage of stock shorting or w/e.
Short answer, if appreciation (the increase in value over time) exceeds costs (taxes, maintenance, mortgage interest, minimum utilities, etc), you are profiting (unrealized capital gains) just by owning the house, similar to stocks and bonds.
Understood. This stems from someone claiming that renting it out for profit is in and of itself wrong. Applying what you said, all renting is criminal according to their logic.
The issue is (the normal and accepted practice of) charging people “market” rates for something that is a necessity.
Like healthcare, housing market isn’t free because the demand part of the market isn’t free.
People tend to mistake choice (the amount of available products that do the same - eg 100 colors of the same 100× overpriced cornflakes) with free market.
You are not going to go live in another country to work there and be homeless. And, if you could buy the place instead of renting, ofc you would want to do that. Even if you dont have the full nominal amount of moneys, as long as your credit payments (eg bank financing) would be lower than rent (well, actually just if the interests payments are lower than rent), you are just losing money paying rent. Even in case of like a really long loan, if you decide to sell the real estate after a year, every penny that you paid to you borrowed nominal is now “yours again” since the loan diminished by that amount and the selling price is within that margin/about the same-ish.
The profit incentive of current owners (ie the ones that just happened to have the opportunity to buy that real estate before you did, or were even born) is the main driver for hiking prices/rents.
And all of the free actors on the market, which are owners that control the supply part of the market, have exactly aligned interest of charging higher rents (that consequently/additionally result in higher real estate prices bought as investments) … guess where the market is headed. Not only at higher market prices, but also supporting other hurdles to buying real estate.
I worked in another country for a few years, renting was defiantly the better choice at the time. I wasn’t going to be there long enough to break even when I sold, and the headache of buying a property in a country that you don’t have citizenship, trying to get financing, ect. just wasn’t worth it.
Oh, that’s true, especially if countries dont have any bilateral agreements. But these are unnecessary complications that should be resolved (like, I can buy stock on basically any open market in seconds with very clear and registered ownership).
Some of them might’ve not been able to (or wanted to) pay for the home ownership. But if this assumes someone not making profit was renting it out then yeah
Who would rather pay monthly payments to a third party if they could pay the exact same amount but get to keep most of the money for themselves (ie in real estate ownership)?
Someone not wanting to commit to house ownership for whatever reason. Could be students, temporarily working somewhere, someone not sure if they want to live somewhere long-term etc. Or someone worried if they can get their house sold when or if they want to move. It can be a commitment and some just don’t want to do that.
And this is all assuming you could get a loan and buy the house in the first place, have enough for the down payment and so on.
As a poor, I’d be happy renting at an affordable rate from the state if the “rental income” was used to fund maintenance and development of state owned housing or plugged back into other social services like my tax dollars are.
I don’t like private owners and private investors profiting of my need for shelter.
Municipality owned rental housing is fairly common where I live. Students often live in apartments owned by a student foundation. As landlords, they seem alright. Private sector is much more mixed and varied, obviously.
I think having different sort of rental property ownership works well enough. Balances each other out. Cheap municipal apartments help keep the prices down in the private sector too while allowing the competition and profit incentive for the private sector to invest in building apartments.
Kind of like our reality of Section 8 housing which I personally think should be the universal norm, rather than a rare exception for which people have to wait on a waiting list for 15 years before they’re granted the exception of subsidized housing. ALL housing should be based upon how much we’re able to pay for it. It only makes sense because
A roof over every human’s head is a basic human need like air to breathe & food to eat.
The first thing primitive humans do is seek out caves to live in, and they learn how to build huts. They don’t have to work 40 hours a week and pay 50% of that to the sky gods for the privilege of shelter from storms.
A roof over every human’s head is a basic human need like air to breathe & food to eat.
The fact that food, shelter, clothing, medical care and education aren’t all considered basic human rights that should be subsidized is depressing as hell to me.
No one should be forced to live on the streets or sacrifice their education.
The reason they’re not able to pay for home ownership is because people buy homes to rent for profit. If poor people only had to compete on price with other poor people instead of with investors, house prices would go back to 20th century levels where you could buy one for 3x your salary.
They had renting back then too and way before that, and it was really large scale too. It’s not really a new phenomenon. And obviously buying a house is still a lot (and I mean a lot) more expensive than renting. Not everyone can save off from their paycheck so that they’d be able to pay for even these cheaper houses.
But in this case I’m not sure if we are talking about situation where the original post’s house was on sale (which would just make it a regular house you have to buy) or a situation where there isn’t any renting at all (or profiting from it), in which case it’d still be more expensive but less so than renting.
Absolutely. It’s the same even in very small scale in buying groceries. You can save a lot by buying bigger sized packages but not everyone can afford to since they don’t have such money on hand. So they’re wasting money (or being less efficient about it) because they can’t afford to not do anything else. Shitty situation.
The people who bought the units, on average, were more wealthy than existing renters, but less wealthy than existing owner-occupiers. Basically, it forced poor people out of that neighborhood, and replaced them with middle class people.
There’s a lot of reasons why buying a house is expensive. In many places, it’s less because of corporate landlords, and more due to population growth outpacing housing growth.
Very simply- you have to be under a certain income threshold to qualify for these homes. The same way it’s done for lower-income housing everywhere else.
Where does this happen? I was under the impression that low income housing was owned by the state, or maybe someone else but under strict control by the state, and you had to fall under a certain income to rent there, not purchase.
Yes, again, because they didn’t do anything about rich people taking advantage of it. I’m not sure why you’re suggesting that “don’t let rich people have the homes” would still make it impossible to house the poor.
Yeah, the whole “what about people who want / need to rent because of their current circumstances” problem really is easy to solve.
Create a crown corporation (for those not familiar, a not-for-profit entity owned at arms length by the government) to handle all rentals, with a mandate to offer rents at a (very low) rate established by a formula that accounts for factors of property value (footage, amenities, location), population density and rental demand in a given area.
Then you make it so that only this crown corp is allowed to charge residential tenants rent. Anyone else who wants to make money off of their second properties and the like will have to sell them to the crown corp. Anyone like in the OP who wants to rent for some months of the year will enter an arrangement with the crown corp where the corp rents the property on their behalf at the rates established by the formula.
The tandem option is also viable, and is actually a really great starting place for this sort of thing (I will fully acknowledge that my proposal would be very difficult to get through any current political system). The public sector deliberately competing with the private to bring down prices has been proven to work. A great example of this is Sasktel in Canada, where the provincial government made their own publicly owned telecoms provider, and as a result all the big telcos, that functioned as an oligopoly everywhere else, offering identical plans at identical prices, had to offer plans that were much, much cheaper in Saskatchewan specifically.
Also there’s absolutely room for debate as to whether a single massive rental company would be better, or whether it would be preferable to have lots of small, regional or municipal corps. I prefer the former only because it would give them more flexible buying power in terms of scooping up properties to rent out, but I’m sure there are strong arguments for the other approach.
Indeed, yes. There are actually a lot of such cases in EU (state sponsors directly or indirectly housing projects a few 100 units at a time), even if it’s “just” a case of better priced (still market priced, but not that extremely “for profit” driven) offerings, people either get to buy or at least to live in contemporary housing of some stature/location (bcs commute is a killer in every non-economical sense). This builds local communities, art, places to live/visit/enjoy, and facilitates families/family needs.
It also helps to stabilize the market & gives a chance for normal people to (somewhat) catch-up up to the market they helped to built/their labor built.
Yes, same here - they are needed in times of turmoil and crisis … in this case the “crisis” being landlords hiking rents.
So in recent years municipalities (and some EU countries) are investing increasingly more into such non-profit projects. It works, rents are low, communities live. Even if buying land and developing got costlier.
Even if this would cost taxpayers money (ie operating with financial loss), I gladly pay it, it benefits us all.
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