Yeah, baffles me when people think that they're doing people a favor by being landlords. Like dude, you are trying to get rich, nothing more. You're not doing anybody anywhere any favors.
To them the only kmaginable alternative is them still having the housing, but just letting it sit empty.
I suppose we would need the government to step up with subsidized mortgages or rent to own programs or something to make things more fair?
The landlord in the OP should have sold their apartment but since they could’ve only sold to someone who could afford the down payment they should’ve also lobbied their representatives to make housing purchases more affordable in the future. (Correct me if I’m wrong.)
Wonder what would happen if all landlords put their properties up for sale tomorrow. Should be a nice housing crash? And then the remaining renters who still cannot afford the newly reduced down payments, they need a solution prior to the houses closing, I suppose…
Well the situation she's describing kind of is that, no?
Sorry I realise I misread the meme. The rest of this is still valid but not so relevant. I'll leave it anyway.
If you own a house, and plan to go on a, say, 6 month trip in a few years. You are obviously not going to go through the 6 month+ process of selling the house, storing all of your furniture, etc... only to have to spend 6 months renting while you look for another house to buy.
So either you store my personal stuff and rent it out as furnished on a fixed term rental contract, or it's empty until you get back.
I really appreciate people's furore at landlords housing scalpers - but single homeowners renting out their house are not the problem. It is perfectly acceptable to own a house and rent it out, you are not hoarding housing and some people need/want to rent for non-financial reasons (they travel for work, they don't like the hassle of managing maintenance, etc).
Won't somebody think of the poor homeowner going an a 6 month vacation?!
This is such a bizarrely niche situation it doesn't need to be discussed.
Sure, I suppose it makes sense for the person going on a 6 month trip to not sell their home. The process of finding renters who just want to live there for half a year, making sure you have someone to maintain the property, and having strangers living in your home isn't exactly easy either.
If laws were pass making it illegal to rent single family dwellings it would have a negligible effect on this situation. The group of people able to afford a 6 month trip, yet need the money from rent, and are willing to let strangers live in their house is vanishingly small.
Yeah, like I said I misunderstood the OP.
That said, I think outright banning renting houses would be a terrible idea. Even if we imagine a world in which houses do not cost the astronomical amounts they do today (which just taking landlords out of the market would not guarantee!), most of the time I've rented I wanted to rent... I wouldn't have wanted to be tied to a house with months of buy/sale at either end of my time there, not to mention solicitor's fees. We obviously want a situation where most people can afford and practically buy a house, it seems stupid to completely annihilate the concept of renting in exchange.
I would also argue it's not necessary. If you have more people owning homes, you also have more people either temporarily or semi-permanently vacating them for a variety of reasons. Travelling for work or fun, moving in with a partner, etc. In those situations I don't see why the need for rental properties (which probably remains relatively small if we consider only those people who actively prefer renting, rather than those who simply can't afford anything else) shouldn't be met by landlords who own a single property that they don't live in... also as you say a relatively small group. Tax the shit out of or legislate against multiple property owners all you like as far as I'm concerned, though.
I know I spent a long time perfectly content to rent, I liked the flexibility and I didn't have time to learn shit like how to fix my washing machine. I wouldn't have wanted to be forced to either live with strangers or spend months buying/selling because it's illegal to rent to me.
I think outright banning renting houses would be a terrible idea.
That's not what I suggested. I suggested banning renting single family housing. If someone wants to rent out their basement suite or turn their house into a duplex that's fine. That and apartment buildings would cover the people who want to rent. The landlord should have to live on the property they are renting.
An appartment is still single family housing unless it has multiple families living in it. This seems like it would just drive landlords to evict families to cram more people into buildings. Or if you mean the building has to have more than one family on separate floors... How does that help? Why should those who choose to rent be forced to live in a flat or HMO?
What would I have done as a 21 year old wanting to find somewhere to live? Here there aren't many flats, there are lots of terraced houses. I wouldn't have wanted to buy and tie myself down, so in this situation I'd either have to pile into a cramped HMO or live in someone's spare room! This is worse for renters and not that much worse for landlords. Here they already cram as many students into what could be a family house as they can because it makes more money, this just makes it mandatory.
Ok, forcing landlords to live on the property kills owning multiple properties... But why not just deal with that? That's the problem! Not people renting houses. Ban or heavily tax multiple residential property ownership. 100% ban corporations from owning residential properties. But housing associations, individuals renting out their one house, and other similar small scale letting is good for people who want to rent.
This seems like it would just drive landlords to evict families to cram more people into buildings.
If that was feasible they would already be doing it. It would also be harder to find people willing to live in these cramped places once there are houses available to purchase.
Ok, forcing landlords to live on the property kills owning multiple properties... But why not just deal with that? That's the problem! Not people renting houses. Ban or heavily tax multiple residential property ownership. 100% ban corporations from owning residential properties. But housing associations, individuals renting out their one house, and other similar small scale letting is good for people who want to rent.
I don't see the practical difference here, where is the person who owns the property living if they are renting it out? Personally this sounds like a loop-hole that would allow married couples to purchase a 2nd property to rent. But sure, banning corporations from owning residential properties and individuals from owning more than 1 sounds like a good idea to me.
As mentioned above this person actually manages to be worse than typical parasitic landlords. She expects them to move whenever she decides she wants to live in the UK again for a bit...
Money rots the brain and the morals...
Too what now?
Ok, sorry. I’m a dick.
Seems to be my specialty and folks hate me for a good reason. Too reasons actually. I’ll tell you the second reason if you ask me two many times.
God. Overkill. I’m really sorry.
I like the unspoken part where the people who have lived in this home must vacate when she decides she wants to spend a few years living in the UK again. They should have to find new accommodation when it suits her, but she is not subject to such requirements.
Tbh that's the reason she bought and rents it out in the first place, so I'm sure she's aware
yeah I don't think she's unaware. just emphasizing that the asymmetric nature of the relationship extends past just profiting off a basic need.
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I don't know how it is the UK, but usually there is a contract period and a minimum period to respect to break the contract.
I don’t know how it its where you live/the UK but there is probably a special clause/law that allows the owner to end the contract if they want to use the property themselves.
Edit: Downvote as much as you want but at least in Germany and France such clauses exist.
In France there is such a clause, but applicable only if the owner plans to rent to a family member of theirs, iirc
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This seems incorrect as far as I understand the source. You still have to respect the contract end date if you recover it for yourself or family. https://www.service-public.fr/particuliers/vosdroits/F929/personnalisation/resultat?lang=&quest0=1&quest=
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This seems incorrect as far as I understand the source. You still have to respect the contract end date if you recover it for yourself or family. It is just one of the legitimate reasons to block the automatic renewal of the contract. https://www.service-public.fr/particuliers/vosdroits/F929/personnalisation/resultat?lang=&quest0=1&quest=
Downvoting because you know damn well how tight the rental market is. You're not guaranteed to find a new apartment in the grace period you have before your eviction is due. Moving also incurs significant time and cost for moving your stuff, lost work days, and the rent which is sure to be higher.
That is my point! You can’t rely on a minimum clause when your landlord can evict you by claiming they want to live there themselves.
I never claimed that that I like this or that this somehow good. The housing market is a steaming pile of shit pretty much worldwide.
As a renters we(!) need be very aware of local laws and regulations regarding rent. Own use claim is not the only way to get evicted: in some cases fixing something in your flat might by regarded as a violation of contract and you’re out.
I have an old contract in one of tightest markets in Germany. If I had to move out my rent would triple.
So yes, I’m aware of the shit market - take my comment as a heads up, not a praise of the situation.
When you added it all up I am pretty confident I spent about 8K USD on my last move. When she is done having fun her sefs will be out that money.
I had a sociopathic narcissistic ex-boyfriend who did that. He owned a townhouse that people were renting out, and when his wife left him and their house was foreclosed and he got evicted, he kicked out his tenants and moved into his townhouse.
HE KICKED OUT HIS TENANTS SO HE COULD MOVE IN 😟
I do not approve of this master/slave dynamic that the housing industry has created. It's inhumane, unethical, sociopathic,
I recently bought an apartment, and while I was searching I always made sure to ask if the apartments I was looking at were being rented (the listings never disclosed that information), and giving up on the ones that had tenants living in them. This always earned me weird looks from the agents - "you can just buy the apartment and kick them out". Yes, the law and the contract will allow it, but my conscience wouldn't.
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.
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.
I think you meant "HP did it with printers" but all told well put. There are worse and better cases, and some victimisers are also victims themselves
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.
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.
The real question is- where are those people going to live when you get back and evict them?
My landlord assured me I'd be able to rent this place for years.
A few days ago he tells me he's selling it, and that I need to move by June 1st, when my lease is until September.
I could fight it, but for what? A few extra months? No point in that headache.
I was hoping to rent a few years till I could buy it, as it is in my home town and near both work and family.
With the crazy rent prices today I'm going to have to move over an hour further just to find a smaller place at similar price.
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.
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.
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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).
Laws is where the change will come from.
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.
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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).
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."
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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
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."
This is why you make a written contract before moving somewhere. If you don't have it in writing, you're shit out of luck.
Even with a written contract, it's still a question of whether you want to fight it, which is often more hassle than it's worth.
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Maybe at the same place they would go if he didn't rent out his appartement but still kept it for when he goes back?
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.
Not for profit, there isn't. Profit as a concept in contemporary economics already doesn't pass the sniff test, but housing especially doesn't.
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.
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.
The way the real estate market is currently set up, a property sitting empty still generates profit as a financial asset.
Please expand.
Yeah but you're paying taxes and maintenance. It's actually not a great investment vehicle if it's sitting empty, it's just generally very safe.
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.
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.
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.
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).
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.
Financing isn't a cost of ownership.
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.
Profit is a byproduct of free exchange of labor. Most people wouldn't labor if it was net negative for them.
Profit is a byproduct of
free exchange oflabor
FTFY
Value is added regardless of whether the labor was freely exchanged.
That said: rent isn't a result of any labor at all
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.
That being said, fuck landlords in general.
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.
The value of a landlord in theory is that they rent at a rate lower than what the mortgage would be
I don't mean to sound rude, but this might as well be fan fiction.
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).
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.
Edit: if I misunderstood your question --> wiki/Intrinsic_value_(finance), wiki/Intrinsic_theory_of_value, wiki/Intrinsic_value_(ethics)
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.
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.
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.
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.
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.
Profit as a concept in contemporary economics already doesn't pass the sniff test
I'm not sure what you mean by this. Do you mind explaining?
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).
The only value landlords have is that is easier to be transient and move around for work and stuff, and not be tied down.
It should be for those in that niche, not because home ownership is too hard to obtain.
If you live in the same town doing the same job, the only reason you should be renting is because you didn't like doing the extra work homeownership requires.
If anything beyond these niche is your market, fuck off.
3rd paragraph is me. I rented the vast majority of my life. I didn't want to mow the lawn, shovel snow, clean gutters, fix/replace major items, eg: hot water heater.
Nope. Not interested.
I rented a place that had a small yard. I was excited to have a yard to tend. After cutting the grass once, I was done.
The landlord had the grass removed and a bunch of local plants put into a garden with a minimal watering system. Never needed to be tended. Was a well-loved upgrade.
You can hire people to do those things and if home ownership were affordable, you would likely be able to afford to pay people to do those things and have it all even out to being around the same as renting.
No thanks. No interest in worrying about upkeep or saving $$ to replace my roof in "x" amount of years. And, as others have mentioned. I've moved a few times without any hassle about trying to sell/buy. People that insist on home ownership are annoying as shit.
I'm not insisting anyone buy a home. I'm just saying the reason you gave would not be a reason to not buy one if prices were equitable.
Sure it is. Why would I want to deal with finding a good landscaper or other service providers, eg: plumber?
I don't care about price equality. I straight up don't want to think about it.
Okay, but why shouldn't that be an affordable option for others? Shouldn't you be able to afford a home and such services just like you could afford to rent if things were more equitable?
I'm not talking about others. Just explaining my position. I'm not here to debate the issue.
lmao so retarded
"where would you live if I didn't own all the houses?"
IN MY OWN HOUSE, BITCH
thanks for trying to pass off you owning more houses than you can live in as a favour to me though, you fuckin fuck
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.
You just wrote that rents are less than mortgages because you personally had a rent less than a mortgage. You're the one who needs to read that.
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.
If I was a landlord, I'd make the serfs work the fields for even more profit. I mean, If I'm gonna be evil, I'm going all-in.
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.
finish some improvement needed to qualify to accept section 8 renters
Let me get this straight, your place isn't good enough for Section 8? That's the definition of a crappy place.
Be honest. Imagine if someone else told you their building was not good enough for Section 8 housing. You know you would think it sucked.
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.
Ah, the "I am a smaller asshole, because others are bigger assholes (but I am still an asshole)" argument
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?
That's like living in america and not owning a gun. Your past virtue signal won't lift you out of poverty.
If you heard a construction worker say something like that standing infront of the building they worked on you would still think he is a bit full of himself.
I mean, at least from a construction worker it sounds more like a badass boast.
"I MADE THESE WALLS WITH MY DAMN BARE HANDS!"
To play Devil's Advocate, the people would only still live there without risk of inescapable debt if they had the qualifications to obtain a loan and pay down payment, as well as means to continue making payments until the property sells again or is paid off. Getting evicted by a landlord sucks but it's still way better than owing the bank money because they can and will come after you for it.
On the flip side, though, you can still get equity from paying a mortgage, so it's possible to sell the property and if it sells fast enough you could pay off the loan without excess interest during hard times.
Buying property comes with risks that renting properties do not have.
I am so tired of the argument that "renters can't afford to buy the property."
Is the landlord making a profit? If Rent - Costs = Profit then the people who can afford the rent can afford the costs, and the money that would have been profit for the landlord can instead be savings for emergencies (that the landlord would have paid out of the same funds while still making a profit.)
If renters can continuously pay rent without ever missing a payment for years then yes clearly they could afford a home, but most US Citizens cannot even cover the down payment. Also, most renters end up missing payments pretty frequently. The system needs to change in a way that guarantees homes, but landlords also aren't inherently in the wrong.
The system is broken, I agree. That doesn't excuse the people taking advantage of the broken system.
People regularly vilify scalping (buying something of limited availability and reselling it for a profit) but for some reason when someone does that with shelter, a thing necessary for survival, we get people defending them.
That's exactly the problem. You're conflating renting out property with scalping. You're saying that Rental Owners are all villains, every single one, and that the world we currently live in would be better without them completely. That's stupid. That just seems like somebody has oversimplified a complicated socioeconomic issue using emotions like fear and hate, and is using that as justification to lose faith in a democratic institution of laws.
I am defending rental properties, I think it as a concept still exists even in a perfect future, because it enables travelers and low-cost living communities on a larger scale while also allowing specializations for maintenance. I think there are some good people renting out full sized homes for barely enough to cover mortgage and maintenance, and I think a lot of renters probably wouldn't be able to handle that sort of responsibility on their own and would end up losing their homes and money.
Not how businesses work. After expenses, they can make a loss for the fiscal year. It happens a lot more often than you think.
If you don't like overcharging in the industry then you should be advocating rent control and proper taxation, not landlord fitted guillotines.
Ah yes, if I'm against landlords I must be arguing in favour of killing all landlords.
You sound like a reasonable person to continue having a conversation with...
If I'm understanding you correctly, I disagree. Homeowners aren't providing a service to renters by allowing them to live "risk free". The "risk" that a homeowner is incurring is the risk of becoming a renter, same as the risk that an owner of a company incurs is just the risk of having to become a worker.
If the place you're renting gets struck by lightning and burns down, or you go to prison and it falls into disrepair, or the properties get raided and seized for some reason: you can just start over at a new place. The person who bought that building, on the other hand, loses maybe hundreds of thousands of dollars, likely plunging them deep into debt which is still accruing interest.
That's true; the landowner is certainly worse off losing property, especially compared to the renter, because the former owned property in the first place. The renter didn't even have an opportunity to fall like the landowner. They don't even have enough to lose. I'm not entirely sympathetic to a person who profits off another person's need for shelter.
We have to fight for our right to be paying the bank for property that no longer exists for the next 30 years. Every human being deserves a chance to suffer this hardship. /sarcasm
I'm not certain I understand this comment, but from the tone it sounds like we're not on the same page. Nonetheless, I would regard property-owning a privilege rather than a hardship, and that just because a person who owns property has more to lose, doesn't suddenly make them noble putting that property at risk for the sake of gaining more.
If the place you're renting gets struck by lightning and burns down
That's what insurance is for.
or you go to prison and it falls into disrepair, or the properties get raided and seized for some reason
Ah, the classic "all renters are criminals" while opinioning on the "value" landlords provide.
Insurance isn't a magic fix-all, mate. Also, lmao, I was implying that if any of those three things happened to the property owner it would be worse off, yet you failed to parse that and instead construed something about renters being criminals? Bro those were your words, and I think you're wrong to think that way about renters.
"I didn't say they are criminals! I just said what if something exceedingly rare happens to them that only happens to criminals? Checkmate!"
I'll go really slow for you.
I said if a landlord goes to prison or the property gets raided and seized then it is worse for them than if a renter has the same circuimstance.
Do you see the part where I singled out renters? No? Then where did that come from? You said that. That was you. You stupid mf.
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
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 tried banning landlords in specific neighborhoods in Rotterdam.
It lead to gentrification.
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.
Or both. There is no reason to offer discounts to wealthy people just because they're first in line.
Im sure they also thought the lack of poor people owning houses was "easily solved" by banning landlords.
But how does pegging the unit ownership to income even work?
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.
and more due to population growth outpacing housing growth.
The population in Spain grew from 46,8 million in 2011 to 47,4 million in 2021, yet housing prices have been steadily risen since the 2007-2008 crisis.
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.
I bought my first apartment because my monthly costs would be like 30% less than rent. Like with many things, it's expensive to be poor.
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.
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.
renting at an affordable rate from the state
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.
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.
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.
Municipalities having their own rental apartments is very common where I live. Though here it works in tandem with private sector.
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.
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.
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.
Exactly. Why would they pay for the ownership/ownership prices if they dont get it? Should it not be available to them at less than that?