A common landlord technique is putting a minimum down payment on a house and having their renters pay off the morgage. I think the above commenter is saying that it should not be allowed to get a massive loan on a house that you aren’t going to live in.
People (talking mom & pop) should not be able to purchase a home simply for the purpose of renting it out.
I agree with that.
The problem is the reason people do that is because of a few things.
The ROI is absolutely retarded. My last house (I live in don’t rent) I made 800k in 10 years. That’s insane. Find me an index that turns 500k into 1.3mil in 10 years
Passive income if you don’t do shit that landlords should be doing like regular maintenance.
The bourgeoisie loves this one neat trick: just let a few of the poors own a little something, and they’ll fight off the rest of the poors without even needing to be told.
Seriously though, anyone want to sell out a generation for a bit of land and monies? I mean, you’ll never be able to pay for unnecessary things with just values and integrity
I will go to my grave that society writ large is broken. It’s not just the rich. Everyone has become a selfish turd out to get a buck on the backs of everyone else. The difference is that some of us are self-aware enough to see it in ourselves.
It’s depressing if you don’t step back and laugh at it all.
Yes and I charge well under market value (like $500 under what I could get) and my tenant does not have to live on the street. Would you rather I kick her out or let her live in my house for free?
You are trying to pass the idea that society is already broken so everybody should just do what the fuck they want. Your are part of the side of society that is actually broken, so all your tirade sounds pretty hypocritical.
S&P 500 did better than that in the last 10 years. I really hate that housing has gone the way it has, because on average it’s not as insanely profitable comparable to other asset classes as people make it out to be, it’s pretty comparable.
I wish it wasn’t comparable though, because we’re just parking a ton of cash to do nothing with it.
True except it’s a little different than equity investments because of the ease of leverage. No one is going to loan me a half million dollars to invest in the S&P500 but they’ll have no problem giving me a house to rent out (if I can prove income).
I don’t think the mom and pops are really the problem (in fact, this is I think one of the few viable ways for regular people to actually get ahead) but all of the things surrounding housing. One can get place renting for $2k, but can’t get approved for that mortgage amount even with tons of history showing it’s paid. Corporations owning massive amounts of property are also a much bigger problem. Appealing to an individual (mom and pop) is generally a lot easier than to try to appeal to a corp in which you’re just Lessee #4949857 who’s spreadsheet tells them to squeeze you for more money because.
Past that, I’d also argue renters need much more support when it comes to their rights because quite a lot of the things that people are posting here as anecdotes to why their landlords are shitty are already illegal, it’s just extremely difficult to get anything done about it. I’d suggest also that there was some regulatory body (if one doesn’t exist already) responsible for certifying housing/landlords because then at least shit would get fixed once a year.
My only half-decent experience renting was a blue-collar mom and pop who leveraged their own home to buy a second home to rent, that they rented significantly under market value. If anything, we should be trying to setup more systems that allow this outcome (they fucked me on the deposit though, but that’s the part about renter’s rights.)
I never understood this sentiment. For single family homes the market sets the price. It’s not like when you buy a house and use it for a rental all of sudden it’s cheaper or more expensive in some way. You could make a price/demand argument but then again the underlying demand is housing not money hungry landlords. If there was not an underlying housing demand, no one would rent and it would fail as an investment.
How does the community serve those who want to rent? Apartments? Now that is where we can agree. Apartment valuation is calculated on operations not on the market. The only way to raise value of an apartment is to raise rent (or reduce expenses in some way but at some point you can only do so much). At least with SFH you have appreciation that landlords can factor in for return.
Lastly, 2 of my rentals were foreclosures. If anything I’m performing the city a service by buying these properties and adding value. If you had to choose, would you rather live next to a vacant house or a rental?
To answer your question, it’s fair for a renter to not build equity because they don’t pay for upkeep or have the risk associated with the loan. You have to put skin in the game at some point.
Edit: there are some good points for the other side of the argument if you keep reading. I don’t know what the answer is but I’m not convinced that restrictions or to disincentivize rental operations is the answer.
I beleive housing should be a privately owned venture, at least for suburb housing where the entire plot is included. Outside of that social schemes should purchase/build properties for rental purposes.
Like you said, the housing market is in demand. But how much of that demand is manufactured by landlords purchasing more property to rent versus real buyers looking to buy-to-occupy?
Your argument for cost of maintenance is part of the equation, however the rent costs should be the cost of maintenance and upkeep with a modest margin for investment. However that’s not the case. Landlords want to take their cake and eat it. Rent is now the cost of the mortgage, AND maintenance/upkeep AND profit. Its a win for landlords and a lose for renters. If the renter is capable of paying the inflated rental costs on a regular, then they should be owning their own home. The current status-quo is unfair.
Just FYI, I am a home owner. I know the costs of mortgages, the risks that are involved and the maintenance costs of keeping a home running.
They should abolish buy to let mortgages. How is it fair that a renter literally pays for the mortgage by proxy but doesn’t have a stake in the home.
I am not being snarky. Can you explain your comment? I don’t understand what you are saying.
A common landlord technique is putting a minimum down payment on a house and having their renters pay off the morgage. I think the above commenter is saying that it should not be allowed to get a massive loan on a house that you aren’t going to live in.
People (talking mom & pop) should not be able to purchase a home simply for the purpose of renting it out.
I agree with that.
The problem is the reason people do that is because of a few things.
The bourgeoisie loves this one neat trick: just let a few of the poors own a little something, and they’ll fight off the rest of the poors without even needing to be told.
Seriously though, anyone want to sell out a generation for a bit of land and monies? I mean, you’ll never be able to pay for unnecessary things with just values and integrity
I will go to my grave that society writ large is broken. It’s not just the rich. Everyone has become a selfish turd out to get a buck on the backs of everyone else. The difference is that some of us are self-aware enough to see it in ourselves.
It’s depressing if you don’t step back and laugh at it all.
This is just whataboutism thou. Are you a landlord?
Yes and I charge well under market value (like $500 under what I could get) and my tenant does not have to live on the street. Would you rather I kick her out or let her live in my house for free?
You are trying to pass the idea that society is already broken so everybody should just do what the fuck they want. Your are part of the side of society that is actually broken, so all your tirade sounds pretty hypocritical.
What are you talking about Willis? I said no such thing.
I live a simple life and surround myself with those who live a simple life.
As for hypocrisy, we are all hypocrites. If you don’t think you are you’re a liar which is worse IMHO.
S&P 500 did better than that in the last 10 years. I really hate that housing has gone the way it has, because on average it’s not as insanely profitable comparable to other asset classes as people make it out to be, it’s pretty comparable.
I wish it wasn’t comparable though, because we’re just parking a ton of cash to do nothing with it.
Capitalism is dumb.
True except it’s a little different than equity investments because of the ease of leverage. No one is going to loan me a half million dollars to invest in the S&P500 but they’ll have no problem giving me a house to rent out (if I can prove income).
Yeah that’s true
I don’t think the mom and pops are really the problem (in fact, this is I think one of the few viable ways for regular people to actually get ahead) but all of the things surrounding housing. One can get place renting for $2k, but can’t get approved for that mortgage amount even with tons of history showing it’s paid. Corporations owning massive amounts of property are also a much bigger problem. Appealing to an individual (mom and pop) is generally a lot easier than to try to appeal to a corp in which you’re just Lessee #4949857 who’s spreadsheet tells them to squeeze you for more money because.
Past that, I’d also argue renters need much more support when it comes to their rights because quite a lot of the things that people are posting here as anecdotes to why their landlords are shitty are already illegal, it’s just extremely difficult to get anything done about it. I’d suggest also that there was some regulatory body (if one doesn’t exist already) responsible for certifying housing/landlords because then at least shit would get fixed once a year.
My only half-decent experience renting was a blue-collar mom and pop who leveraged their own home to buy a second home to rent, that they rented significantly under market value. If anything, we should be trying to setup more systems that allow this outcome (they fucked me on the deposit though, but that’s the part about renter’s rights.)
Let = rent
I never understood this sentiment. For single family homes the market sets the price. It’s not like when you buy a house and use it for a rental all of sudden it’s cheaper or more expensive in some way. You could make a price/demand argument but then again the underlying demand is housing not money hungry landlords. If there was not an underlying housing demand, no one would rent and it would fail as an investment.
How does the community serve those who want to rent? Apartments? Now that is where we can agree. Apartment valuation is calculated on operations not on the market. The only way to raise value of an apartment is to raise rent (or reduce expenses in some way but at some point you can only do so much). At least with SFH you have appreciation that landlords can factor in for return.
Lastly, 2 of my rentals were foreclosures. If anything I’m performing the city a service by buying these properties and adding value. If you had to choose, would you rather live next to a vacant house or a rental?
To answer your question, it’s fair for a renter to not build equity because they don’t pay for upkeep or have the risk associated with the loan. You have to put skin in the game at some point.
Edit: there are some good points for the other side of the argument if you keep reading. I don’t know what the answer is but I’m not convinced that restrictions or to disincentivize rental operations is the answer.
I beleive housing should be a privately owned venture, at least for suburb housing where the entire plot is included. Outside of that social schemes should purchase/build properties for rental purposes.
Like you said, the housing market is in demand. But how much of that demand is manufactured by landlords purchasing more property to rent versus real buyers looking to buy-to-occupy?
Your argument for cost of maintenance is part of the equation, however the rent costs should be the cost of maintenance and upkeep with a modest margin for investment. However that’s not the case. Landlords want to take their cake and eat it. Rent is now the cost of the mortgage, AND maintenance/upkeep AND profit. Its a win for landlords and a lose for renters. If the renter is capable of paying the inflated rental costs on a regular, then they should be owning their own home. The current status-quo is unfair.
Just FYI, I am a home owner. I know the costs of mortgages, the risks that are involved and the maintenance costs of keeping a home running.