You have that option, it's called buying a house and getting a mortgage. You just rent from the bank for 30 years first. But you're not thinking x=30 with any responsibility other than writing a check, I bet. If I had to guess, I'd say you want x<10 and you still don't want to pay for maintenance, or property taxes, or have the value reassessed as soon as you take occupancy, or be forced to stay there if you decide to leave. You want all the benefit with none of the cost or risk. It's fine to want that but let's not pretend "rent should be illegal" is a serious or reasonable policy proposal.
There's a reason why a mortgage with very little down payment is a lot more than comparable rent.
> You have that option, it's called buying a house and getting a mortgage.
A landlord will happily swallow 50% of your income but a bank will start to feel bad about a ~30% debt to income ratio, so no you can't really.
Reminder that a 300k mortgage over 30 years at 5% costs you 600k in the end, so you're fucked either way, at best your kids might benefit from your investment.
Housing got way more expensive since the 2000s, most people are priced out of buying a house, most can't even qualify for a mortgage to afford an average house.
The average Joe, well, median Joe in that case, living alone in say France/Germany/UK can barely qualify for a 200k mortgage over 30 years, and that won't get you much unless you plan on living like a student your whole life
> A landlord will happily swallow 50% of your income but a bank will start to feel bad about a ~30% debt to income ratio, so no you can't really.
It's almost as if the banks know they're very likely to lose money by approving loans people are statistically unlikely to be able to make 360 on-time payments for.
> Reminder that a 300k mortgage over 30 years at 5% costs you 600k in the end
100% true and stated this way makes it sound like it's the evil bankers, but really it's just the way math works.
> most people are priced out of buying a house
I don't think "most" is accurate here, especially if you include areas don't have insane NIMBY restrictions on building like SF and NYC.
This[0] shows there are absolutely places more affordable than others. My one complaint is that if everything gets more expensive the map doesn't really change so it could be better.
And I've heard the rebuttal before about "that's where the jobs are" (false) or "that's where I grew up." I get it, but living in high-demand places is not a constitutional right. Not having your own home in a major downtown metro is not a violation of your rights. If you can't afford to live somewhere, you should move. I'm in the 4th state I've lived in in my life right now. I might be here until I die, I might live in 4 more. Lots of things play into that but a major part of the calculus is whether or not I can afford to live the life I want here.
> It's fine to want that but let's not pretend "rent should be illegal" is a serious or reasonable policy proposal.
So its fine for you that there are people owning 20+ properties speculating on profit for basic human needs? Its literally Nestlé "this is MY water" behavior.
Most people here are pro capitalism. It has flaws but you’re also being blind to its benefits.
If 20 people need homes to live in and can’t afford to build them, suddenly landlords/investors have a place because they built housing inventory where others couldn’t. They won’t do that for free though and why should they.
I remember your username from prior threads, you’re a troll man. Take this crap to Reddit.
I don't disagree, but I would argue that the same thing can be said from any kind of "investor" who then capture most of the value produced just because it turned out they had the money that others had not (most of the time just because they were born in the right family)
What does this say about tenants though? You expect someone to buy a home that you can’t afford, rent it to you until you can. Meanwhile, maintain it while you rent it, pay the property taxes and insurance as well, basically have a tiny cash flow off my investment-all to just be forced to sell it to you in the end when my only hope of getting ahead on this was some long term appreciation or the build up of equity. Spoiler, equity doesn’t usually build up very fast. Better chance of appreciation building up, but even that is a pretty big risk because you’re trying to time the market.
I was a landlord for a bit and what I’ve found is that tenants that have probably never actually owned a property have no ideas about what it cost to own a property and what the landlord is actually making off your rent. Sure even if you pay a few thousand in rent, it may be the landlord only has a couple hundred of cash flow. Then, one repair on the home can easily wipe out a year or more of that. One bad tenants can wipe out a decade of it.
I recall my worst tenants ever. Weren’t even that bad all things considered but the were dirty people. The house was filthy when they moved out. The walls and floors were coated in a grease like film. I had a no smoking policy in the lease but it was obvious they smoked and used the floor as an ashtray. There was a handful of other things that were just broken. Anyways it was a 4 bedroom house that was 2500 sf. I got a few quotes to paint and fix the list of little stuff. The cheapest quote I got was $15k but there was also a $20k and a $30k quote. I decided not to go after these people for the damages but I told them the long list of repairs and because of the condition and cost of repairing it all I would not return their deposit which was only about $2500. Anyway they completely lost it calling me a slumlord and how there’s no way they could have generated that much damage and reported me to the state and wanted to sue me but I don’t think they found a lawyer to take the case. They thought I was marking up all the repairs costs and scamming them. I just sent them all 3 quotes and told them I chose the lowest and wasn’t asking them to pay the excess (I knew it would just be a bad debt). But they went through every line item and said they knew what it cost to paint a house and it was overpriced. This is where the problem is. They’ve never owned a property, never hired a contractor or handyman so they actually have no idea what these things cost. And in my city, construction is booming and everything housing related does seem expensive but it is what it is. There’s no cheaper way to do it besides DIY. But my labor isn’t free either and I’d charge more for my time than the contractors do so that’s not really a solution either.
> Sure even if you pay a few thousand in rent, it may be the landlord only has a couple hundred of cash flow. Then, one repair on the home can easily wipe out a year or more of that. One bad tenants can wipe out a decade of it.
I love how this conveniently ignores the equity you acquired in this year and almost certainly the appreciation.
I went from renting for a decade plus to buying four years ago and while I have had to make repairs (replace HVAC, which I knew about at purchase, replace electrical main panel), and things can be expensive, there’s definitely a contingent that likes to act like they need more protections as landlords because to listen to them just owning a home means writing a four digit check or credit card transaction every month if not more.
I'm not sure why this is a surprise to you. People take much better care of their own stuff, because any damage is a direct hit to their own pocketbook. Whereas bad tenants can be careless with no real consequences to speak of; the damage they cause is ultimately defrayed via higher renting costs across the board.
> I love how this conveniently ignores the equity you acquired in this year and almost certainly the appreciation.
I love how I addressed both those things in my comment and you chose to ignore it or just didn't read
Appreciation is a gamble that you bought at the low or just plan on holding for a very long time and even then, most economists will tell your real estate should appreciate at the rate of inflation - so not a good investment. Rent can go up but that's a gamble too, or just takes a long time to become significant above your mortgage payment. Everything else goes up with time as well - tax, insurance, maintenance, etc. So it doesn't flow through to the bottom line like you think it does.
Equity is not very material either for the first decade or more. Most landlords have a mortgage to pay on that property and you should look into how an amortization schedule works. Your rent payment is mostly going to interest to the bank, not building equity for the landlord.
The landlord is mostly taking on a huge risk in hopes the stars will align and 1) appreciation will happen 2) equity will be built and 3) it's not all eroded by a high maintenance structure or bad tenants destroying the place. The main reason it is so prevalent in the US is, low interest rates for a long period of time allowed leverage (most landlords would not be if they had to pay cash) and shortage of housing inventory and housing cost more to build that many people can ever afford-aka-forced to rent.
Sure, there's plenty of regulations that could be done to falsely manipulate this market. But, so far, the only reason rentals continue to be developed is because of the investment opportunity. If that went away due to regulation, I for one wouldn't trust our government to solve the problem completely and also fund development, renters can't fund it or they wouldn't be renters, and so prices just go up even more because there is now a severely limited supply of rental housing and no ability for investors to deploy capital towards that problem. Like most things related to regulation, you can't just ban something without thinking the problem through more completely and having a holistic solution. If you do, you just are meddling and will screw it up worse than it already is.
If you’re talking about the corporate landlords, yeah. But the real issue is we’re not creating enough housing of the correct type in the US (like missing middle). Only choices are either McMansions or “luxury” apartments that are made from cardboard.
You have that option, it's called buying a house and getting a mortgage. You just rent from the bank for 30 years first. But you're not thinking x=30 with any responsibility other than writing a check, I bet. If I had to guess, I'd say you want x<10 and you still don't want to pay for maintenance, or property taxes, or have the value reassessed as soon as you take occupancy, or be forced to stay there if you decide to leave. You want all the benefit with none of the cost or risk. It's fine to want that but let's not pretend "rent should be illegal" is a serious or reasonable policy proposal.
There's a reason why a mortgage with very little down payment is a lot more than comparable rent.
> You have that option, it's called buying a house and getting a mortgage.
A landlord will happily swallow 50% of your income but a bank will start to feel bad about a ~30% debt to income ratio, so no you can't really.
Reminder that a 300k mortgage over 30 years at 5% costs you 600k in the end, so you're fucked either way, at best your kids might benefit from your investment.
Housing got way more expensive since the 2000s, most people are priced out of buying a house, most can't even qualify for a mortgage to afford an average house.
https://cdn.statcdn.com/Infographic/images/normal/34534.jpeg
The average Joe, well, median Joe in that case, living alone in say France/Germany/UK can barely qualify for a 200k mortgage over 30 years, and that won't get you much unless you plan on living like a student your whole life
> A landlord will happily swallow 50% of your income but a bank will start to feel bad about a ~30% debt to income ratio, so no you can't really.
It's almost as if the banks know they're very likely to lose money by approving loans people are statistically unlikely to be able to make 360 on-time payments for.
> Reminder that a 300k mortgage over 30 years at 5% costs you 600k in the end
100% true and stated this way makes it sound like it's the evil bankers, but really it's just the way math works.
> most people are priced out of buying a house
I don't think "most" is accurate here, especially if you include areas don't have insane NIMBY restrictions on building like SF and NYC.
This[0] shows there are absolutely places more affordable than others. My one complaint is that if everything gets more expensive the map doesn't really change so it could be better.
And I've heard the rebuttal before about "that's where the jobs are" (false) or "that's where I grew up." I get it, but living in high-demand places is not a constitutional right. Not having your own home in a major downtown metro is not a violation of your rights. If you can't afford to live somewhere, you should move. I'm in the 4th state I've lived in in my life right now. I might be here until I die, I might live in 4 more. Lots of things play into that but a major part of the calculus is whether or not I can afford to live the life I want here.
[0] https://www.visualcapitalist.com/mapped-u-s-housing-affordab...
2 replies →
> It's fine to want that but let's not pretend "rent should be illegal" is a serious or reasonable policy proposal.
So its fine for you that there are people owning 20+ properties speculating on profit for basic human needs? Its literally Nestlé "this is MY water" behavior.
Most people here are pro capitalism. It has flaws but you’re also being blind to its benefits.
If 20 people need homes to live in and can’t afford to build them, suddenly landlords/investors have a place because they built housing inventory where others couldn’t. They won’t do that for free though and why should they.
I remember your username from prior threads, you’re a troll man. Take this crap to Reddit.
7 replies →
Say they don't. If they can't afford to buy their own house, now those people no longer have a place to live. How is that better?
[flagged]
I don't disagree, but I would argue that the same thing can be said from any kind of "investor" who then capture most of the value produced just because it turned out they had the money that others had not (most of the time just because they were born in the right family)
What does this say about tenants though? You expect someone to buy a home that you can’t afford, rent it to you until you can. Meanwhile, maintain it while you rent it, pay the property taxes and insurance as well, basically have a tiny cash flow off my investment-all to just be forced to sell it to you in the end when my only hope of getting ahead on this was some long term appreciation or the build up of equity. Spoiler, equity doesn’t usually build up very fast. Better chance of appreciation building up, but even that is a pretty big risk because you’re trying to time the market.
I was a landlord for a bit and what I’ve found is that tenants that have probably never actually owned a property have no ideas about what it cost to own a property and what the landlord is actually making off your rent. Sure even if you pay a few thousand in rent, it may be the landlord only has a couple hundred of cash flow. Then, one repair on the home can easily wipe out a year or more of that. One bad tenants can wipe out a decade of it.
I recall my worst tenants ever. Weren’t even that bad all things considered but the were dirty people. The house was filthy when they moved out. The walls and floors were coated in a grease like film. I had a no smoking policy in the lease but it was obvious they smoked and used the floor as an ashtray. There was a handful of other things that were just broken. Anyways it was a 4 bedroom house that was 2500 sf. I got a few quotes to paint and fix the list of little stuff. The cheapest quote I got was $15k but there was also a $20k and a $30k quote. I decided not to go after these people for the damages but I told them the long list of repairs and because of the condition and cost of repairing it all I would not return their deposit which was only about $2500. Anyway they completely lost it calling me a slumlord and how there’s no way they could have generated that much damage and reported me to the state and wanted to sue me but I don’t think they found a lawyer to take the case. They thought I was marking up all the repairs costs and scamming them. I just sent them all 3 quotes and told them I chose the lowest and wasn’t asking them to pay the excess (I knew it would just be a bad debt). But they went through every line item and said they knew what it cost to paint a house and it was overpriced. This is where the problem is. They’ve never owned a property, never hired a contractor or handyman so they actually have no idea what these things cost. And in my city, construction is booming and everything housing related does seem expensive but it is what it is. There’s no cheaper way to do it besides DIY. But my labor isn’t free either and I’d charge more for my time than the contractors do so that’s not really a solution either.
> Sure even if you pay a few thousand in rent, it may be the landlord only has a couple hundred of cash flow. Then, one repair on the home can easily wipe out a year or more of that. One bad tenants can wipe out a decade of it.
I love how this conveniently ignores the equity you acquired in this year and almost certainly the appreciation.
I went from renting for a decade plus to buying four years ago and while I have had to make repairs (replace HVAC, which I knew about at purchase, replace electrical main panel), and things can be expensive, there’s definitely a contingent that likes to act like they need more protections as landlords because to listen to them just owning a home means writing a four digit check or credit card transaction every month if not more.
I'm not sure why this is a surprise to you. People take much better care of their own stuff, because any damage is a direct hit to their own pocketbook. Whereas bad tenants can be careless with no real consequences to speak of; the damage they cause is ultimately defrayed via higher renting costs across the board.
> I love how this conveniently ignores the equity you acquired in this year and almost certainly the appreciation.
I love how I addressed both those things in my comment and you chose to ignore it or just didn't read
Appreciation is a gamble that you bought at the low or just plan on holding for a very long time and even then, most economists will tell your real estate should appreciate at the rate of inflation - so not a good investment. Rent can go up but that's a gamble too, or just takes a long time to become significant above your mortgage payment. Everything else goes up with time as well - tax, insurance, maintenance, etc. So it doesn't flow through to the bottom line like you think it does.
Equity is not very material either for the first decade or more. Most landlords have a mortgage to pay on that property and you should look into how an amortization schedule works. Your rent payment is mostly going to interest to the bank, not building equity for the landlord.
The landlord is mostly taking on a huge risk in hopes the stars will align and 1) appreciation will happen 2) equity will be built and 3) it's not all eroded by a high maintenance structure or bad tenants destroying the place. The main reason it is so prevalent in the US is, low interest rates for a long period of time allowed leverage (most landlords would not be if they had to pay cash) and shortage of housing inventory and housing cost more to build that many people can ever afford-aka-forced to rent.
Sure, there's plenty of regulations that could be done to falsely manipulate this market. But, so far, the only reason rentals continue to be developed is because of the investment opportunity. If that went away due to regulation, I for one wouldn't trust our government to solve the problem completely and also fund development, renters can't fund it or they wouldn't be renters, and so prices just go up even more because there is now a severely limited supply of rental housing and no ability for investors to deploy capital towards that problem. Like most things related to regulation, you can't just ban something without thinking the problem through more completely and having a holistic solution. If you do, you just are meddling and will screw it up worse than it already is.
2 replies →
[flagged]
Stuff like this is unironically (okay, kind of ironically) why I identify as a landchad.
https://www.reddit.com/r/LoveForLandchads/
> Landlord isn’t nearly as profitable as some people think.
I am aware of that, still doesnt stop people from speculation and therefor preventing others from buying.
If you’re talking about the corporate landlords, yeah. But the real issue is we’re not creating enough housing of the correct type in the US (like missing middle). Only choices are either McMansions or “luxury” apartments that are made from cardboard.