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Yo know, with all that extra money I have just piled up everywhere lying around taking up space in my shitty, dirty, tiny apartment I’ll just gather it up and buy a house down at the house store! It’s sooo simple… what a great idea! 😉
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Yes, people are hating the game. That’s the entire point.
Where I live a one bedroom apartment starts at half a million dollars. A house is well past one and a half million USD. Guess I’m failing at step one: have an extra house.
ITT People who vote third party and expect things to change
Lol, I’m not sure what that has to do with this post, but imagine voting for the same two parties and expecting change.
Depends on the voting system tbf. In FPTP, unless one party is extremely unpopular, it often supports your political opponents when you vote third party.
But what if both current mainstream US parties are my political opponents? The lesser of two evils is still evil.
Well, if you don’t care if either party wins, vote third party. However, if you really dislike the idea of one party winning over the other, despite hating both, you should really think about how that vote is actually going to affect the future.
That’s not the way it should be, but that’s the way it is.
My landlord’s two brothers who inherited a bunch of properties from Daddy. One of them lives in Scottsdale and the other in Hawaii. It really gets my goat knowing that 1 out of every 3 dollars I make goes to some overprivileged daddy’s removed boy. I probably pay their golf membership or marina docking fees.
Thats the american dream isnt it? To be exploited until you do the exploiting? God I love America
“Ferengi workers don’t want to stop the exploitation. We want to find a way to become the exploiters!”
What’s the problem? If you don’t buy a house you need to rent one, houses aren’t free. Yeah those owners never worked for it, but isn’t that the case with every rich kid? Why don’t you buy a crappy house you can fix up yourself?
lol just buy a house and stop complaining it’s so easy, said the completely out of touch boomer
Because I have 200 bucks to my name
That’s strictly a you-problem.
Pull yourself up by your ball sack
Most people living paycheck to paycheck don’t qualify for a 20 year loan for land and a home even in the case of crappy manufactured homes. Plus, if they ever defaulted, they would lose the home and probably quite a bit of the equity as well, depending on local laws.
I like that crab face, lol. Which cartoon is it from?
SpongeBob SquarePants duh.
Nah mf, is Spongetron Squarelacks
Really? Nothing?
Yes, nothing. Except for repair and maintenance and servicing all those cost and insurance and worrying the tenant doesn’t pay and all those headache people never forsee. Nothing.
You mean all the stuff they can easily outsource and still make a profit? You make it sound like landlords are doing us a favor.
Then do it and become a landlord if its that easy.
Why don’t I just become a billionaire too while I’m at it? Oh right, because I can’t just opt into having the money to be part of the ownership class.
Exactly and where did the money come from? They earned it until they had enough to invest in a house.
Right, because rich people “earned” their money. Good one.
Yes, actually. Where do you think their money came from? (Alternatively their relatives may have earned it, that shouldnt make a difference for you though).
“if you can’t fix the problem, just become part of it!” Great advice mate 😂
How dare they provide so much value to you that you feel the need to give them a good amount of your money.
What part is the “problem” exactly?
Exactly, as a person of land myself this crowd doesn’t appreciate the amount of effort I put into making the houses I own livable for you profit streams. There are costs associated, which means I’m the one truly being exploited here, not the people paying me to live in my extra home.
Nope, i make it sounds like you’re someone that’s never think beyond their own perspective.
Edit: to add, it’s survivor bias to think that all home owner on earth are earning huge money from the property and can afford to outsource the work and still make profit.
“Anyone who disagrees with me is living in a bubble!”
Childish actuations make you sound like a child.
Ohh you’re not? Because your point doesn’t seems like you’re anywhere outside the bubble of your own. Maybe try a better argument perhaps? Or you can keep whining idk i don’t really care.
Yeah, honestly, small town landlords and building owners have to keep up repairs and constantly monitor the situation so that the tenants don’t burn down or cause an infestation that tanks a 200k USD miminum (it goes a lot higher from there) investment that wouldn’t have been payed off for 13 more years as per the contract for deed.
They also have to file all the receipts, run background checks and keep documents on their tenants, and keep their leases up to date. All of this has to be securely stored for like 6 years.
There is a lot of risk involved in getting shelter to people who need it the most in the USA. Not everything can be a charity, if you’ve got a problem with that system then you don’t have an issue with landlords you have an issue with corporatocracy and real estate moguls on a much larger scale using a necessary resource as a semi-fungible currency. More than 1 in 20 homes in the USA are owned by Chinese investors. I’m sure there are some bad apples but the majority of non-affiliated landlords are just doing what they need to do to minimize financial risks and stay afloat.
Sometimes things like Lawyer Consultation Fees, Eviction Serving fees, Vacancies, and Water Damages forcing you to replace the flooring, the boards, some insulation and vents… It can run into the negative multiple months in a row. Sure they get some of it back after Tax Season, but they still had to pay in Quarterly Taxes up until that point so in order for it to work they need a lot in savings.
Repairing property you already own isn’t a job.
What?
Yes, it’s not a job it’s a business
Repairing property you already own isn’t a business either.
Renting a property you own is a business, and repairing property that you rent out is, unsurprisingly, a business expense.
They seem to provide some kind of vakue to you, otherwise you could just buy a house.
You could just buy a house.
Can you just step back from the keyboard and realize how stupid what you’ve just said is?
The fact that you cant buy a house shows that your landlord is providing value to you, because they make living there affordable where it would otherwise be unaffordable.
My statement still stands: IF they werent providing any value to you (eg. making living there more affordable) then you could just buy a house. (But they do provide value which is why you can afford to rent but not afford to buy a house).
Paying a higher amount in rent than a mortgage would be is not making living affordable. They’re exploiting the fact that many people can’t access credit or afford to make a required down payment/stamp duty/legal fees, etc. up front.
Alright but wouldnt you then say banks, for example, are also exploiting you (because you have to pay an interest when takking out a loan)? Isnt that also exploiting the fact that many people dont have the money upfront"?
Landlords do a lot! They own the house. They move your money from your account to their account. And once in a while, they spend some of your money on fixing the sink that you pay them to use.
Better than the neighbors from where I grew up turning their land into two big trailer parks.
It used to be a nice little place, just out of town right off the main road. We never even really had to lock our doors. Later on, shitheads from the trailer parks would break in, steal anything not nailed down, made the whole area crap.
One of the landlords had their house broken into when she was staying with her husband at the hospital for a couple days. Complained that the trailer park people don’t pay and just hitch and leave if you try to force anything.
Still has the trailer park going strong over a year later.
People who use their property are distincly less of a blight on society than those that just own stuff.
And all it cost was everybody else’s peace of mind, windows, and property.
You sound like an HOA goon.
Landlords actually do a lot of work. Maintenance and dealing with tenants can easily become a full time job if you have multiple properties. A lot of people buy rentals thinking it’s “passive income” and then end up working twice as hard as before.
If you have multiple properties you hire someone to do that work. ‘Landlords’ include property companies that own hundreds of units, which is the majority of ownership in the US. Do you think the owners of these companies are doing maintenance and dealing with tenants? The executives are in effect the landlords, and all the work they do is figure out how to make more money off of their company’s investments, aka figure out how to better extract income from tenants.
If you’re talking about the owner of a property company, that’s a company owner not a landlord. Still a tough job to run a company.
What does it mean to be a landlord then? Are you saying the properties owned by these companies have no landlord? I don’t doubt it’s a tough job to run a company, I still don’t think that justifies the amount of our profits we give up to ensure we have shelter.
Properties owned by a corporation do not have a landlord. They are owned jointly by a group of investors who assume the financial risk. You can be a property company investor too if you want, there are a number of such companies called REITs that sell shares on the stock market and return a quarterly dividend.
They also assume all the risk of the property too. Tenants can leave as they please but landlords are stuck with the property if the market turns.
Oh wow boo hoo, they have so much risk 😔 they have an entire house that they can sell at any time, who someone else is paying the mortgage of. Oh, the horror! If the market should crash they’ll lose the equity another person paid!
Really the landlords are the victims here, not the tenants paying their mortgage for them plus a little extra for profits. Clearly the tenants have committed the crime of not having good enough credit for a loan, or the crime of not having enough for a down payment, so they aren’t worthy of owning property.
No no it’s the landlord who has the real problems, because they could ein a shaky financial situation of “selling the second house iown” if the market dips!
Landlords also absorb all the risk if the tenants skip out on two months of rent and leave the unit with no appliances, dog piss stained floors, a body sized hole in the bedroom wall, a toilet that leaked noticably but never reported resulting in extensive water damage, etc.
While its guaranteed that theres a lot of shitty landlords out there, and a ton of price-gouging corporate management companies (who are the real problem these days eith affordability)… I’m fully convinced every user who says “landlords are the devil” are they, themselves, the Tenants from Hell who do not pay the building they live in the tiniest modicum of respect; then wonder why every landlord hates them and hassles them.
Agreed, there has to be a level of understanding. Just because you live in a space and pay rent doesn’t mean you can go wild and let the place crawl with refuse and roaches. I have an upstairs neighbor in my apartment complex that is the quintessential definition of the renter from hell. And we get all their roaches even though we keep the place spotless. And not to paint the landlords as martyrs here, as they have their own issues, but some people have a bad case of main character complex and think the rest of us that have to suffer with the stench and infestation are just the NPCs.
What risk? A landlord that isn’t a complete idiot would have set aside some of their extortion money or required a deposit.
Do you know how easy it is to do a rental deposit’s worth of damage to a property?
Do you know how easy it is to extract other people wealth enough to fix it?. Shit happens. Use your that extortion money you’ve been saving.
Chris you people are a special bunch.
Who’s Chris?
People will assume you are exaggerating but I will back you up here. These things happen and can all easily happen at one property.
Oh yeah. I’ve lived it and breathed it… a few times. Cleaning up a ruined house fucking sucks and it’s expensive too. Makes me wonder how some people stay alive with how quickly they wreck stuff.
Which hasn’t, ever.
So the 2008 economic crisis never happened? Where I live (Europe) houses are actually going down in value right now too.
Going down fractionally, after having grown an incredible amount in the last 3 years. Please don’t swallow this obvious bullshit. Prices are high, prohibitively high, and are going to stay that way until everyone bar a few is forced to rent.
https://www.whitehouse.gov/wp-content/uploads/2021/09/figure-1.jpg
It’s not so simple…
Like if you had bought a house in 2005 you’d have been stuck in it for a long time unless you are willing to take a loss. Offcouse in the long term prices are going up, that’s inevitable with inflation and our current system.
No one forced them to be a landlord. Tenants have very little choice. Why is there even a comparison here?
Sounds like a good problem to have
Eh, I wouldn’t say the housing market on the whole is fickle in the same way as as the stock market. But for things like property damage, the risk is definitely on you
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The places I’ve stayed so far pay a company to deal with these issues in place of the owner.
I can’t speak on what that costs, however.
Management companies typically take a percentage of the monthly rent (can vary wildly from 8% up to 25%+). This also means they have a vested interest in increasing a building’s rent by the maximum legally allowed amount every single year, because it means they make more without doing additional work.
Even dealing with a property manager can be a full time job for owners.
*Some
Many do not do much of this at all, sadly
Yeah, these memes are made by kids who have never actually worked at all, much less at upkeep on a property they don’t live at. They probably whine about taking out the trash every week and beg their mom for new games while thinking they’re independent somehow.
Apparently you think Adam Smith is an immature child.
Who?
I’m not sure if you’re serious, Adam Smith was one of the most influential political thinkers during the development of modern western governments and capitalism. His views shaped the discourse of politics heavily in the last three hundred years.
It’s not my job to educate you.
You expect too much of me to succeed where others have clearly already failed.
The best part of lemmy is that douchebags like you out yourself so freely, it makes quick blocking so much more efficient.
Lmao someone is a self important douchebag but it isnt op
It’s OP
They’re supposed to do all those things but most don’t. I’m a condo super and the owners who own and rent multiple units are the worst. Their tenants are always calling me about every issue, and I have to remind them that I deal with the common areas, not the interior of their unit unless there’s a flood. Those landlords tend to own multiple units and just assume I will deal with their issues, but I won’t. When you own, you’re the super, manager, admin, etc. But most landlords I’ve encountered just wanna collect the check
It’s genuinely not easy, both my parents have owned rental properties at some point in their lives, as a retirement investment. I’d never consider a rental property as an investment myself as a result of what I’ve seen tenants do to a property.
Sir this is a reddit clone please join the landlord hate circlejerk or GET OUT OF HERE
You have to have money to make money. It’s just that first step that’s the problem…
Save money
You have to have money to save money. How does a person save money if every dollar earned is spent on necessities?
You do not need money to save money. You need money to invest.
Find inefficiencies in how you spend money and fix them to reduce expenses. Then save this difference.
The most common areas people spend too much are housing and cars.
And now you just reminded me of the retarded secretary of commerce in Chile who said, when complained to that people had to wake up at 5 AM, spend two hours in a commute to start a shitty 7-to-5 jobs to earn less than a living wage, he answered them with “lol just wake up at 3 AM, you just gained two hours”.
You aren’t wrong, but lets take someone like me for example. I don’t have a car, I rent a studio apartment below the average price in my area, I eat less food than I should and try to reduce my power and water costs when possible. I have a job that pays well for my area and I can barely afford rent, until recently I often required help from family to afford it. I agree there are probably ways I could save some money. But look at the wealth in the US, there are incredible profits for property companies and hedge funds, this money doesn’t just come out of the air. There is a siphoning of wealth from the working class. To say that these struggling workers need to save or invest might be true for some but there are much bigger factors in the increasing inequality of wealth.
I agree that the rich in America are siphoning from the poor. But I think that the biggest way they steal from the poor is through debt, not living expenses.
Think about it. Americans are taught that they must go to university right after high school. Kids are forced to make a huge financial decision without any understanding of the consequences, and there’s a lot of social pressure on them to conform by taking out a student loan.
Next Americans are taught that they should always use credit cards, and that they need to build a good credit score (so they can get approved for more debt later.) They are again pressured by advertising and social norms to take on debt, in addition to the gimmicky rewards like airline miles and cash back, which intices you to spend more than you normally would.
Finally people have even started using debt products like margin trading, which allows you to lose more money on the stock market than you even have, and apps like Afterpay allow you to buy expensive items you can’t afford. It’s just a never ending cycle of debt.
If people were taught about the debt trap from an early age they could protect themselves and actually save their money, not become a wage slave like so many Americans have.
Please just read any communist literature about class oppression instead of making up wild theories about why the working class is so poor. You’re trying to reinvent the wheel without any idea about how a normal wheel functions in the first place.
Sorry professor, I didn’t realize I interrupted your communism 101 lecture. Unfortunately I live in the real world where not everyone is out to get you and not everything is hopeless.
You don’t really even have to save money if you’re smart with the first time homebuyers credits and grants.
Or just work for a living
They should see it as a job, and maintain their damn properties.
I am a condo super and constantly have issues with these multi unit owners who rent out, as their tenants call me about every broken fixture and I have to remind them that their landlord is their super, not me. I only take care of the common areas.
Landlords don’t realize that their job is to be the property manager, super, handy man and administrator for the property they rent out. They’re not just supposed to sit on their ass and collect a check.
Right, but do the faux revolutionaries in this thread know the difference between a good landlord and a bad one? They seem to enjoy basking in righteous anger and not to care for nuances.
Good landlords hate bad landlords too. There’s a lot of common ground to be shared.
I’m somewhat “glad” I’m not renting a place owned by some rich chucklefuck, but one owned by a company. I know, sounds weird, but at least my rent money is going to something useful, since they employ their electricians, plumbers etc., hire a cleaning firm to clean the stairwell, and have a website where I can report problems, look at my energy consumption, stuff like that.
You rent from a responsible company it sounds like. In my part of the country, there are a few massive companies that own a large amount of property and do fuck-all, have no online portal for anything, take weeks to deal with things like leaking pipes and such. I’m newish to the state so I’m not sure how they get it away with it legally but I’ve heard a lot of horror stories from these companies. I rent a place now from some rich dude for a very reasonable price, he owns a handful of properties and they do well on the maintenance and everything, it definitely depends.
Aye, the one I’m renting from is a local company. You find lots of them all over Germany, managing the huge apartment buildings, especially the old soviet concrete blocks. Outside of places like Berlin they’re usually reasonable.
I looked after a house that my brother owned while he was out of the country for a few years. The first tenants were a group home that destroyed the place so much we had to gut the drywall and they never paid the rent until I hounded them endlessly every month. Every month.
The other tenants were just regular families and pretty good for the most part.
I would say I was dealing with something related to that house all the time. Every three weeks for stuff. Leaky faucet, roof shingle gone, branch fell on the lawn, sewer backed up. Big and small, all the time.
And they always called late at night or very early in the morning. This was before texting and email was common, etc.
My brother was paying me to do this, I would have done it for free but he insisted, but I was so glad when he sold that place.
I dealt with everything promptly. A family friend ran a property mgmt business and his crews did all the work promptly and billed us direct. People still always seemed annoyed and dissatisfied. Never again.
Rentoids are usually disgusting.
ITT: Poor, downtrodden
leecheslandlords talking about how hard it is to be a landlord, when the easiest way to end their suffering is to just sell their extra fucking house(s).Where I live landlords (if they’re renting directly at least) are in a big legal responsibility over all kinds of stuff. The easier way is to rent through some company that deals with the renter.
They have once a year paperwork to do and still bitch and moan and they still call it work.
It’s disgusting.
The one “person” I know also drags tenants to court over stupid shit (he always loses 🤣)
sadly if you try to be a good landlord and make a slim margin, you’ll get dumped a huge repair bill/tax increase/other expense and now you’re running the appartment at a loss. At that point you either sell it to a company willing to exploit it or you have to be less nice to your tenants and ignore repairs or charge more. Most people choose the first which is why we end up with terrible landlords.
aside: heard someone in that exact situation running low income housing, on a phone call with an expert talking to the government. The expert said “any prudent management would raise the rents the maximum allowed amount”
ITT: economic incels
Shelter is a need, owning women as property is not. It is disgusting to compare people complaining about landlords and people complaining women won’t be their possessions.
ITT leeches saying “actually consuming your blood is providing a vital service and takes a lot of work”
Or worse, theyre just aspiring to be leeches
ITT angry communist noises
Holy fuck the “everything I remotely disagree with is communism” shit in this website is seriously annoying, did I time travel to 1950s America or something. Like I think lemmy might legitimately be the worst for it. it’s putting me off coming here.
Maybe branch out to another instance, I got here through lemmy.dbzer0.com, instances other than lemmy.world seem to be much more tolerable if you are tired of those sorts of comments.
You’re on lemmy.world which is an anti-communiet instance.
Naww, you regular traveled to modern America.
Are the 50’s making a comeback over there? should i expect Elvis impersonators returning to the mainstream or something?
Yes, successful land reform movements have historically been lead by angry communists, thank you for pointing that out for anyone who might be interested in a little land reform that their best bet is to look into communist strategies of land reform.
Step 1: have an extra house
Step 1: Use the equity you’ve built up in your primary dwelling to put a down payment on a second house, which you can rent out. Congratulations, you now have a second job to fill your evenings and weekends.
Step 2: Hope like hell you get a decent tenant who pays the rent on time and doesn’t destroy your property.
Step 3: Pay all of the taxes, mortgage payments, maintenance costs, repairs, legal fees, etc., which the rent will just barely cover. Of course, most of the mortgage payment goes to the bank as interest.
Step 4: Keep crossing your fingers that you don’t rent to someone who will destroy your property, fail to pay rent, sue you, or cause any other major headaches.
Step 5: After 20 years of doing this, you have now paid off that second house. Yay!
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Using equity from current property to buy a new property? LOL
My friend, you are begging for pain… but appreciate it. Live that grind til you get repo’d
People do this, it’s called “refi and roll.” The idea is to find properties that pay more in rent than they cost to upkeep.
Cool, now try being the renter who paid off your mortgage for 20 years and has nothing to show for it.
The system is exploitative to both sides if they have low capital. The only winners are the capitalists who already have more than enough.
They wouldn’t be landlords if they didn’t think they wouldn’t make money off of it. However the petite bourgeoisie are often squeezed by the haut bourgeoisie, and if that happens enough we get fascism as class warfare on the part of the big beautiful boaters and car dealership owners.
I agree there is a problem where people that rent and want to own can’t because of affordability. However, renting is less risky. Renters aren’t on the hook for major problems with a property. Imagine a leak goes undiscovered and causes major damage and mold to your apartment. What do you do as a renter? You move out, find a new place, and maybe even sue your landlord for damages and health impact.
What does your landlord do? Try to find enough money to cover the repairs, vacancy, and hire a lawyer.
Let’s not act like renting isn’t without its benefits. I think the factor most people overlook when they think about owning property is RISK. Risk means you could lose something or be liable. Renters have limited risk. If you’re taking on risk, you should be rewarded for it, otherwise you wouldn’t do it. Also, the reward is supposed to make you resilient to risks materializing. If the reward isn’t big enough, then when a risk materializes into a real problem, you won’t have enough capital to recover from it and you’ll go bankrupt.
I can’t even imagine how devastating it would be to have to sell my second home.
I mean, it’s more than that though. You could sell the property at a loss or have it foreclosed on. Selling incurs fees of roughly 6-8% of the selling price… so, even if you sell it for what you bought it for, you could still be in the red. You might walk away $100ks in debt.
You can be jealous of people in that position of having multiple properties all you want, but ask yourself if you were in their position whether you would somehow respond differently to the incentives and risks?
If you had enough money to buy multiple properties what would you do?
I would do what I do now and invest in companies making products I really care about. I wouldn’t own two houses. To me, that’s unethical. I understand that not everyone considers it that way, but you should also understand that I do.
Who rents for 20 years and then acts all surprised that they don’t own the house? If your end goal is to own a house, start by buying a house. If you can afford to rent and pay off someone else’s mortgage then you can certainly afford to pay off your own mortgage.
You certainly can, right? But that doesn’t mean you’ll qualify for a loan.
That and I can’t save up enough for a down payment cause rent/inflation/student loans/car payment. I was a teacher for 6 years and couldn’t save a penny. If I wanted to make more money I needed a master’s degree which I also couldn’t save up to afford.
How is someone supposed to save for a mortgage when they’re busy paying off someone else’s mortgage?
How is that the landlord’s fault?
Well, because as a class they raise the cost of land, meaning that many peoples only option is to rent. And then you have to pay off their mortgage for them.
Note that in the USSR apartments were 5 percent of income. That is what the actual cost of maintaining homes for people is, when you remove all the rent seeking and property speculation.
When you find yourself comparing to the USSR I think you’ve already lost your argument. Since it boils down to “eradicate capitalism and rent becomes cheaper”. Maybe it does and everything else becomes a lot shittier too.
There is a huge difference between small and large landlords. The example I gave was clearly related to small landlords. If you have two houses and two mortgages and are doing your own maintenance, you aren’t driving up the cost of housing significantly. If you are a small landlord, as I’ve described, the only “profit” you’re making goes straight into the payments on that mortgage, most of which is interest for the bank. Also, those “profits” won’t be realized for 20+ years. Of course, I’m talking about averages over time. Clearly, housing is unbalanced right now, and bubbles create exceptions.
Large landlords, hedge fund investors, foreign investors, large AirBnB investors… these are a different story. They are the ones on large amounts of property, creating artificial scarcity, jacking up rents to unreasonable levels, etc.
The problem is not the landlord. They made it possible that there was a house to rent.
The problem are other voters who prevent zoning laws that allow property that is cheap enough to buy.
Landlords do not build houses, they own houses. Saying that they provide housing is equivalent to saying Jeff Bezos delivered your latest Amazon package.
Owning things is not creating things.
Do you disagree with something that I wrote or are you reaffirming my point?
This part:
They made it possible that there was a house to rent.
Obviously.
Well, didn’t they? They manage the risk that the construction of the house is profitable. You cannot build houses everywhere.
If you don’t want landlords then you need public housing. That’s where the voters come in.
If you are a renter, there is a big probability you move a lot, and buying is simply not so convenient due to your current situation. But it is unfortunate that many people also can’t afford to buy a house or apartment and are only able to rent. What are you, as a landlord, supposed to do if you are living paycheck to paycheck with the mortgage you took for the apartment that you rent ?
Depends on the country. Apparently most people in Germany rent because that’s just the way things are over there. I would say in the UK that generally people only rent if they’re living somewhere on a relatively short term basis. Otherwise they might either buy their own property or apply for social housing depending on their income level.
You forgot the step where wealthy investors & hedge funds crash an artificially inflated market, you go bankrupt and they swoop in to buy the property from their friends at the bank for half of what you paid for it.
That seems like a completely sustainable aspiration for everyone!
Why are landlords getting so much more hate than other parasites? There isn’t much difference between them and business owners. No one should be able to profit from ownership alone.
There is actually, being a landlord is more of a feudal relationship within the framework of capitalism.
Now, both lords and capitalists should be
talked to about their destructive behavior and have their private property repatriated by the working class through legitimate state mechanisms, but there is a difference.
I’ve calculated if it would pay off to build a house with four units on a piece of land that I already have. It would barely pay for itself after 30 years but let’s be honest, 30 years is when the first big renovations are in order. I’m not sure if the “landlords are rich leeches” - trope holds up outside expensive cities with inherited properties.
I think the main money maker isn’t rent. It’s owning (or at least having a mortgage on) property that doubles in value every ten years.
The rent often just pays for the mortgage and upkeep. The main payday comes when they sell it all off to the next parasite.
Whenever I do the math on buying a multi-family, I find you’d either not be breaking even or barely breaking even with the mortgage, insurance, and taxes by charging market rent. The current landlord is basically claiming future rents as his own when he sets the asking price at level that takes all of the current market rent price for himself.
If you buy the property and want to have enough to do repairs / renovations and cover unexpected risks like tenants that can’t pay and won’t leave, you HAVE to go up on rent, otherwise you will go broke and lose the property.
Maybe there was a golden age when being a landlord meant instant cash flow and money making opportunities, but I find most of the stuff on the market today are just people looking to cash out all future value in the property and assuming the next landlord will basically just jack up rent to cope with the high cost of that cash out.
Being a landlord is pretty risky. You could end up with a bad tenant that ruins your property or won’t pay and won’t leave. You also are responsible for costly repairs and renovations that can have long breakeven timelines. You have to cover that cost some how, and that is by charging rent. Who would assume that risk without a reward?
Real Estate long-term ROI - 4% per year
NASDAQ long-term ROI - 11% per year
It’s about diversity, and the various tax advantages to owning the property/business/etc.
Good luck getting 11% a year in the stock market. I think your stats include the pandemic and I don’t think we’ll see increases like that again, at least we can’t count on it.
11% has been a financial planning standard since time immemorial (ok, well, since after the great depression). If a hedge fund or other investment isn’t hitting 11%, you should be in S&P or NDQ which flattens to 10% over time… or “only” 6-7% after adjusting for inflation.
The last 30 years are considered “below average”. The market only grew 9.9%/year on average. Which apparently that 0.1% is a big deal for investors.
Here’s a fairly good breakdown on SOFI. Obviously, we’ll never know what the future holds, but 10% over time is the “bad return” that rich people talk about.
That’s how it should work, but home hoarders want an income from rent and so the system doesn’t work.
I disagree. Property prices should not be spiralling out of all sanity at the rate it’s doing, especially in city areas.
That’s what’s causing people to buy them, because it earns more than stocks and shares.
Bricks and mortar should never have been viewed as an investment.
Sounds like a dangerous game, it assumes that property always appreciates value faster than inflation progresses.
It would be a dangerous game if the politicians and their donors weren’t also playing it and rigging it in their favour.
Would you like to look up a graph of home prices over the last century?
That’s risk
It’s hard to get a good return on your investment in residential real estate without using leverage.
For instance: You don’t buy one place outright. You buy 5 with 20% down. You may not have positive cash flow, but at long as it isn’t negative not only do you get all the increase in value, you also get more equity every month as the tenants pay your mortgages.
If you bought it outright and over some period of time the tenants have paid your entire investment and the price of the property doubles, you doubled your money. If you buy 5 and over some period of time the tenants pay your mortgage and initial investment and the properties have doubled in value you have increased your initial investment 10X. And before the big expensive renovations come in, you can sell and buy something else if you’re not equipped to deal with that.
Also if you are just breaking even to get free property but you want to start getting passive income, after a few years you can refi to a longer term and lower your mortgage payments to get in the black every month.
This isn’t advice, fuck anybody buying up single family homes to rent, just showing one way they can generate both wealth and passive income for nothing. Literally nothing if they’re using a property management company.
Fuck anybody buying up single family homes to rent. I know I already said that, but it bears repeating.
Fuck anybody buying up single family homes to rent.
It was worth one more.
I’m not sure what you used to calculate it, but it definitely isn’t only “expensive cities with inherited properties”… I did the math on the last house I rented: lived there for 8 years. It was a duplex in a city in a very cheap cost of living state. Just my rent alone for those 8 years more than covered what the entire duplex was purchased for 3 years prior to me moving in. That means if both sides were occupied, which it was for all but 1 month in the 8 years I was there, it’s paid for in full in 4 years. Even if you “have to renovate” in 30 years, hell even 15 years, you have 10 years of pure profit even after considering insurance and property taxes and probably even maintenence costs…
Maybe your area doesn’t have high demand for rentals or you under-valued your rent price, but there wouldn’t be so many people doing it if it wasn’t profitable.
Germany, not the US here. The market isn’t a no rules free for all here.
there wouldn’t be so many people doing it if it wasn’t profitable.
That’s basically our problem here, too few new appartments are getting built because of this.
“Landlords are rich leeches” is still true because the vast majority of property in the US is not owned by hard working people who are investing their earnings owning a handful of properties at most, but by property companies and hedge funds.
Sure, but I think this example also commingles labor with ownership (as is often the case).
Like you said, your plan involves building a four-family home. That’s labor and worth fair remuneration. It’s just that, in order to get that remuneration you’d be taking payment from tenants who build no equity for their money. Yeah, you’ll have to renovate in 30 years, but you’d still have property and the money paid in rent while they don’t.
A landlord can also simultaneously do valuable work supervising and managing a property. That’s not mutually exclusive with profiting from ownership, and we can separate how we evaluate the two. It even comes up with billionaires: Bill Gates obviously did work worth payment as CEO of Microsoft, it’s just not where he got most of his fortune. It can simultaneously be true that he’s a talented guy who deserved to be paid, but most of his fortune came from exploitative business practices and profiting off of the labor of others.
Also, to be clear, there’s a difference between structural and individual criticism. Obviously slumlords are pieces of shit, but there’s a difference between that and someone who really does work as a property manager doing right by their tenants, or a family renting out a part of their home to make ends meet. I can think that landlords should be judged on an individual basis, while landlording as a thing shouldn’t exist.
That’s how a mortgage works. But the point is that after those 30 years you have a million dollar asset. That you had your tenants pay for.
For a regular plebs like us that’s not a winning proposition because we can’t have our money tied up for 30 years but for people who don’t need their money liquid, it’s free real estate
I’m on your side mostly but the property prices going up in those 30 years would net you a fortune alone. You could likely sell it as is and triple your money
Wouldn’t that depend a lot on the area?
Well yes it would but not entirely.
The old saying ‘buy land because they aren’t making anymore of it’ is true. As the world population grows, owning large amounts of land will be scarcer and scarcer. Most young people can’t afford a home in any western nation across the world and it’ll only get worse the world over as time goes on and the population continues to grow.
Some areas are losing a lot of their value. Waiting for population growth to fix that is playing the really long game
Guidelines for buying rental properties say they should pay off in 10 years.
Yeah, well, here they don’t. Currently, building from new costs about 3200€/m2, provided you own the ground already.
Average rent for a newly built, low energy appartment with fibre to the home and covered parking including a wallbox (so, basically the optimum you could build with a high rent in mind) around here is about 9 to 10€/m2. So that’s 26 years before the building is paid off and that does not include interest for a loan or upkeep for the building. With 4 percent of interest which seems to be the lower end of the market right now I’d never break even.
Buying here is cheaper (1600 per sq meter in the commie blocks part of the city) and rent is about the same. Outside of those blocks you’d usually get copper and no real insulation, with street parking. A brand new apartment in a nice place might net you 15-20 eur per square meter.
Of course, I live in the ass end of Europe where wages are half of what they are in the west so it makes sense our rents, food costs, etc are higher. The peasants shouldn’t have too much to their names.
Tenants also pay any loans associated with the apartment building repairs, or the repair fund collection, not by law but because apartments are in demand and tenants are not. The law actually says it’s the responsiblity of the owner, but there’s literally nothing saying that responsibility can’t be shifted.
If it’s a poor investment, why do it?
That’s the point, I won’t. And so do many others and that’s why we have a shortage of appartments for rent here right now.
It really depends on the nature of the rental and your area. If instead of building a house you build 4 closely stacked duplexes and charged each one double what the mortgage would be you’d definitely make money, but you’d also be an extortionate leech. In my area someone built 4 nice duplexes on a double lot (probably around 1.5 acres) and is now renting them at $1800 each. The land was probably less than $55k and the cost of construction was likely less than $1 mil. At 5% interest on a 30 year loan their monthly payment would be $5,600, but they’re bringing in $14,400 per month.
$1800 for rent is an extortionate price in my area (it’s big city apartment rental prices, with a pool and gym), even after interest rates went up.
On the other hand, I knew a couple who were landlords for nearly 20 years. They rarely raised the rents and even in 2022 they were still charging <$1000 per month for a full house because that paid the costs and for them it was an investment, not a source of income.
They finally sold their rental homes and made about $70k over what they originally paid on each house. Doing the math that comes out to be a roughly 8.5% annual percentage return without counting the rent gained each month. That’s a fairly solid investment without being a sucky person.
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Well for a couple reasons.
- I don’t have a million dollars
- I couldn’t qualify for an investment loan worth a million dollars without making some really poor/speculative decisions
- Being a full time landlord is super profitable and trouble free until it isn’t. If you get some troublesome tenants your sweet business decision can become a freaking nightmare.
- This estimate doesn’t include taxes or insurance
- I think these rental prices are outrageous and I’m surprised anyone agreed to them. Not sure who these people are, but someone took the deal. Maybe there was some sort of arrangement so that they didn’t pay the listed rental price (like x number of months free, waived deposit, etc).
- I wouldn’t be surprised if the owner is overleveraged unless they were already independently wealthy or they got in before the interest rates went up.
For a while between 2020 and 2022, if you had your home paid for, you could take a mortgage out on that property and invest that money and make more money on the return on investment than the payment for the mortgage and the taxes owed on your profits. That’s how low the interest rates were for a while. I have a coworker who refinanced his house for 2% on a 30 year fixed rate, inflation is generally higher than his interest rate. Doing that sort of thing, taking a loan out on one house to invest with, is stupidly speculative but I wouldn’t be surprised if people did it.
Needs a small loan of a million dollars
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It literally is no problem if you already have assets to use as collateral. The problem is that most people don’t.
This is the answer, literally this is what millionaires have been doing for ages. It’s just unique that the COVID era interest rates were so low that it made it so that 100-thousand-aires could do what millionaires had already been doing.
My former landlord avoided increasing rent for as long as he could but eventually he was just in red and had to do it.
The big money’s isn’t in the rent, the rent is just to pay the mortgage and upkeep. It’s that you’re getting in debt that someone else is paying for you while they gaurd your asset which is only gaining in value, you then sell that somewhere in the futute.
On average, the same amount of money dropped into the NASDAQ will have much better overall returns. Real estate ROI is about 4% per year, where the stock market has held close to 11% over the long haul nearly a century.
For small-time landlords, it’s often about “I have a place for me or a family member to live if things go bad”. For bigger ones, it’s the tax-shelter and the low volitility of real estate, as well as diversity in case you need to sell when their stock is down.
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Being a landlord isn’t a way for someone who doesn’t have wealth to acquire it. It’s a way to park your existing wealth in quickly appreciating assets preferably purchased from other losers when they lose their asses and collect monthly rent too.
If on day one you have 700k and you purchase an existing property and in 30 days after you rent it out your property is still worth 700k and you are now ahead of the game in 30 days not 30 years.
If you purchased at a reasonable time a year later its worth 750 and you’ve collected 84k 1% of property value per month.
Most owners are in the top 10% to start with.
quickly appreciating assets preferably purchased from other losers when they lose their asses and collect monthly rent too.
I wouldn’t say quickly appreciating, though. It’s a fairly slow growth rate for someone with that kind of money. They diversify into real estate because it creates some tax protections (your costs) and it’s fairly stable. Like buying into a terrible small business, but one that magically won’t fail. The things that could cause total loss to real estate are usually handled in standard insurance, unlike a business that can just tank.
The thing is, as you and the other person said, it’s all about the big companies who own tons of real estate AND the big companies that manage rental properties.
