Fundamentally the service you are paying for is risk alleviation.
Buying a whole ass property and putting a 20 year mortgage on it is a pretty big risk, home prices fluctuate wildly, shit can go sideways, things can break, anyone who’s ever had to suddenly face a situation where “You now have to cough up 10s of thousands of dollars asap or your home becomes condemned” understands this. It happens.
Renting means the landlord assumes this risk for you, they now have to be the one who goes bankrupt if the boiler, washing machine, dishwasher, toilet, sink, whatever suddenly shits the bed and now you have a small pond in your living room or whatever.
Renters get to have a home to live in, with many renters rights, but they at any time can just walk away from the deal and go find somewhere else to live.
If you buy a home, do you think you can suddenly go “ah nevermind Im not feeling it anymore” to the bank and walk away from your mortgage? No, it’s an assumed risk you are now chained to for 20 years.
You either have to find some other person willing to buy that risk off of you (sell your house), which is a HUGE amount of effort and requires lawyers and realtors and etc, or live with it.
Renters get to swerve all that and THAT is primarily what you are paying for.
Once you own a home you begin to understand how enormous some random bullshit bad dice roll can quite suddenly empty your entire bank account.
A pipe explodes? a bird decides to fly through your window? Your shower suddenly cracks? Your washing machine shits the bed?
You are the only person around who is liable for all that now when you literally own it, which means you and only you are responsible for fixing it. Hope you had the money set aside.
If you are renting? You call the landlord and they fix it and you dont have to pay a single penny
Every single day you spend living in the home is wear and tear on the facilities. You use the machines, you open and close doors and drawers, that adds up to non zero costs.
Do you think Air conditioners never break down from use? Fridge blowers dont suddenly shit the bed? Furnaces dont require yearly maint?
That shit is expensive and if no one lived in the building, all of it could be shut off.
This is all stuff you are leveraging onto the landlord when you rent, so yes, obviously that is worth a monetary value.
Yes exactly, do tenants really think they could afford to pay for a new A/C suddenly? Could they use the 50% of their income they pay us now in rent to fix it? No, they’re too stupid to do that, they’d just spend it on beer and avocado toast if landlords weren’t around to take it from them.
yeah okay, just confirmed trolling, kk
It’s the truth, did you earn the money you’re using to fix things, or did the tenant?
The landlord is being paid for assuming the risk.
It’s no different than paying to rent anything else. You can’t afford to buy a whole as 50k car when you visit a country, but you’ll pay to rent a car for a week.
You can’t afford to buy a whole ass house, but you do wanna rent one short term.
Not just in terms of raw cash to buy it, but also affording all the financial risk if things go sideways.
The renter has decided “yeah I can’t afford if the engine shits the bed on a 50k car”, if their rented cars engine shits the bed, the company they rent from handles it.
In return you pay a fee to temporarily use the item, without taking on that risk.
This is fairly basic stuff, but people seem to have missed these lessons in school I guess.
They’re being paid because they own the property and along with other landlords constrain supply by both having rentals and warehousing empty units.
You’re not absorbing risk, you’re tenants collectively are along with supporting you and your entire family’s lifestyle.
The only way you’d be absorbing risk is of you gave tenants equity they built up whole paying your mortgage.
You clearly don’t understand how risk works then.
If the house floods in a disaster, do you think tenants are liable for that at all?
No. They can just walk away and go find a new home.
Do you think you can so easily do that of its a house you have 15 years of mortgage left on?
SMH
I agree with you on most points, landlords are inherently being paid for assuming risk. I believe what is unfair about the situation is that some of the risk they are supposed to assume is actually carried by government programs. The tenants are paying taxes that the landlord benefits from as a form of insurance (risk mitigation) while the tenant does not. This is a form of wealth redistribution in which the landlords benefit.
A prime example is flood, just like you said. FEMA has historically stepped in to mitigate that financial risk. The tenants’ taxes essentially pay for “federal flood insurance” for the landlord.
You clearly don’t understand how profits work. Renting is profitable so all this risk you speak of paid for by the tenant along with the outsized profits landlords enjoy.
THANK YOU. Tenants don’t understand how hard it is to collect rent so that you can buy other properties, so that you can collect more rent.
We alleviate the burden by using their rent to save up the money needed to buy real estate.
Your response sounds a lot like you didnt read a single thing written.
Its closer to “collect rent to pay for the constant deluge of random shit breaking down and failing”
Typically landlords dont actually make a lot of “take home” pay per hour, its a full time job. People seriously underestimate the enormous amount of bureaucracy involved in maintaining a rental space. Theres mountains of legal paperwork all the time. Every single thing that gets fixed has to be tracked and filed and entered in and accounted. Money has to be tracked very carefully so you dont get audited by the feds. etc etc.
Its not as simple as “call the plumber”, its…
“call up the insurance agency, tell them what happened, send a bunch of emails, get the approved in network plumber assigned to you, the plumber agency calls you, you confirm the time the plumber will arrive, they then fax you a bunch of paperwork to fill out, you fill that out and then file your own copies, you then send that back to the plumber agency, they send you back some more info, you have to copy and file THAT now, then you have to go find your notification of entry paperwork and make a copy of that, then you gotta go let the tenant know when the plumber is going to arrive and deliver them the notification of entry…” … “then on the day of you get further coordination, you have to drive over to the location and use your keys to let the plumber in, give them access to what’s needed, then make sure they fix it, then they give you even more paperwork to fill out, then you make copies of that, then you file all that, then you have to followup with the insurance agency and let them know everything is fixed…” … “Then later in the year when you are doing your taxes, you have to go find all that paperwork and make sure it’s included as part of your filing, of course”
All for 1 single plumber trip.
And realize every single time something, anything has to be done, the landlord should be tracking that shit, and you can pretty quickly see why it starts to become a full time job.
Yes I did. You pay for everything with the rent you collect. You are not protecting anyone from any risk.
Not to mention homes appreciate, which is why you own them, so any of these “deluge of shit to fix” that you’re supposedly protecting them from can easily be paid for with credit backed by the equity of the home.
Or just buying a new home with a warranty or an old home with deferred maintenance priced in.
Homes very much don’t appreciate in value unless constantly maintained.
And you are lucky if you can afford to pay for the fixes with rent.
In reality, it’s not uncommon for 1 bad dice roll to evaporate your entire bank account in an instant.
It’s purely a gamble, through and through.
Renting is fundamentally paying money so someone else can gamble their entire life savings instead of yours.
And sure, lots if people do fine for 10-15 years without some shit happening.
Fundamentally, here’s how it works:
There’s this game of Russian roulette going on people play. It’s a 100 chamber gun though, very small chance you get shot and die.
If you dont die though, you make a little bit of money everytime you pull the trigger.
You have to play this game though, or, be homeless which is it’s own different game of Russian roulette.
However, someone offers you a deal.
They’ll pull the trigger for you on their own head! If they win money, they keep it, but if they die it’s their fault, not yours.
In return you don’t have to be homeless, but also you don’t gotta play the r6ssian roulette game.
All they ask is you pay them some money to cover the risk they are taking on, so you never have to pull the trigger.
That is what you are paying for.
Blah blah blah, the average upkeep on a home is 3% of the home’s price. On a 400k home that’s 12 grand. That’s 1k a month for a 3br home. Rents for something like that would top 3k.
That’s why we call it RENT and not a service. No one would pay over 3 times as much for something they could do themselves.
Homes appreciate on average 1% a year so you’re really talking about 8k out of pocket or $800 per month for maintenance.
You’re not taking taxes and interest on your mortgage into consideration and historically there’s a higher return on investment to just use the money to invest in the S&P.
If landlords don’t exist, what’s your solution for people who don’t want to own or aren’t financially or mentally able to have that level of responsibility? You can be able to rent a house without wanting to own it, doesn’t mean you want to live in a state owned apartment either…
Because you talked about the “risk” that landlords absorb like flood and fire.
And how much your mortgage is is predicated on how much of a down payment you put down. A down payment that tenants can’t save because of the parasitic draw of landlords.
The only reason why renting is cheaper than buying now is because of rampant speculation by DUN DUN DUN LANDLORDS. You want me to be great full for a solution to a problem YOU CAUSED.
Before COVID made AirBnBs 10x money machines, and RealPage allowed landlords to fix prices, buying was actually a little cheaper than renting in all but the most desirable cities.
Regardless the Real Estate rentals making 100’s billions of dollars. All the “risk” and equity that landlords are supposedly providing is all coming from tenants fully fucking stop.
As far a solution for the people that absolutely positively can not buy, that you couldn’t give a fuck less about considering how many people you’ve kicked our onto the streets already, who previously could afford rent, it’s called public housing, ie just give them a home. We already do it in Mississippi and it works great.
Bruh, landlords write off the interest on their taxes. Plus there’s depreciation, a lot of landlords don’t pay any taxes at all. You are such a landlord shill.
Lol give me a break, a tenant is not going to be filing insurance claims every month. That’s like a once or twice in a lifetime thing.
If it’s not you’re not going to have insurance for long.
Tell me you’ve never owned a property without telling me you’ve never owned a property, lololol.
God I wish it was “once or twice a lifetime” holy shit lololol.
Oh sweet naive child.
Tell me you move the goalposts without telling me you move the goalposts.
Homeowners don’t file insurance claims to hire plumbers. And sorry but filing work orders or insurance claims is never going to turn into a full time job for a individual homeowner.
If you’re talking about property management of multifamily complexes yes that’s a job but when you spread that work out among all the units it turns into minutes of work.
And like I said, all this “risk” would be easily affordable if the tenants weren’t paying rent.
You are so adorable, you really think landlords make billions because of how hard it is to pick up the phone and talk to an insurance agent.
Insurance exists for a reason, loans exist for a reason, and the difficulty in selling a home is artificial because it’s treated like an investment that appreciates instead of a commodity that depreciates like it actually is.
Landlords buy bad appliances all the time, they are incentivized to, the cheaper the better because they don’t have to live with the consequences except for repairing it when it breaks.
In exchange for not owning anything in the place you live and having a fundamentally worse experience for it you get to pay someone else their mortgage AND their repair fund. You don’t take that into account. Renters pay for everything, we just pay it every month instead of in lump sum hits like an appliance dying.
Landlords do not provide a service, at best they provide living mobility which could be improved drastically if housing wasn’t treated like a private investment but instead a public service - so what little service they do provide is artificial.
The home is not the investment, the land is. Land is scarce, especially in desirable places. The home itself does depreciate and frequently drags down the price of the property, with new owners often tearing the place to the ground after purchase.
Renters do not pay for everything. Ask any financial advisor and they will tell you it is cheaper to rent than to own. It’s a very common strategy to rent, then take the extra money you save and invest it into stocks and bonds for retirement. In the long run, if your investments match the S&P 500 (not hard to do with index funds) then you’ll have more money than you would have if you bought a home (at national average real estate growth rates anyway).
You might point to some place like San Francisco and claim the people who bought houses there back in the 1990s beat the market. Sure, but that’s the Texas Sharpshooter Fallacy. You could just as easily have bought a house in Detroit instead. I would also say you could play the same game about picking stocks after the fact, but that would be beating a dead horse.
So why do people buy houses if they’re a bad investment compared to stocks? Emotional value, mainly. Having a place to call your own is important to a lot of people.
So why do people buy houses if they’re a bad investment compared to stocks? Emotional value, mainly. Having a place to call your own is important to a lot of people.
Also, of course, the same reason one buys anything.
If you own it, you can do whatever you want with it (mostly). Wanna repaint an entire room? No problem. Wanna tear down a (non load bearing) wall and move it? Easy. Wanna tear up the lawn and add raised garden beds? Call before you dig but aside from that, go for it.
Most of that sorta stuff of course isn’t kosher if you are renting :p
If you buy a house as an investment you need to work extremely hard to actually net positive. Simply buying a house and sitting on it is usually net negative (reminder that the price tag you buy the house at isnt how much money you pay, you have to account for all the extra interest you pay over 20 years, which is usually a solid +35% or more of the cost of the house)
So your house has to appreciate not only more than the interest you paid, but then even more to also beat basic blue chip stock rates.
Which is, at best, a gamble.
The main way you actually profit is if you renovate the house to boost its value. And that takes a fuck tonne of work. If you hire other people to do it, it wont be profitable, you have to do it yourself to have a hope in hell of netting positive.
So hope you are good at mudding and taping walls, cause you are gonna be doing a lot of it~
Ok, I refuse to read the whole thing because you’re wrong right at the bloody start. You can in fact sell a house along with the mortgage. It’s not a fucking risk. Finding another buyer isn’t that big a problem as the demand is fucking huge, unless you’re selling a literal dump, in which case you’re a monster for wanting to rent it out.
As for taking care of the place, there are countless companies that’ll rent it out for you, if you really don’t wanna deal with your tenant’s bullshit. Like what the actual fuck are you even taking about? If as a land lord you chose to go the extra mile to squeeze out every penny, you don’t get to complain about it being hard when there’s an easy way out.
You can in fact sell a house along with the mortgage. It’s not a fucking risk. Finding another buyer isn’t that big a problem as the demand is fucking huge
Tell me you’ve never actually sold a house without telling me you’ve never actually sold a house.
There’s a mountain of paperwork, legalwork, fees, hiring, back and forth, inspections, certifications… etc etc involved.
If you seriously think it’s “easy” to sell a property, you’re clearly way to naive to even be participating in this convo in a meaningful way, as you have demonstrated effectively zero knowledge on the topic of realty.
Again, there are companies to do it for you. All you HAVE to do is show up a dozen times and sign papers. Sure you might lose a bit of money in the process, but since we’re talking “buying house money” the so called risk is negligible. We’re talking the amount of money you could put on a savings account and the monthly yield on that alone would seriously affect how many hours you need to work.
So you’re advocating that because tenants pay the landlord to assume the risk - they shouldn’t have to worry about anything related to the property?
So for example if the door buzzer doesn’t work and the landlord knows this and hasn’t fixed it because it doesn’t affect them - it’s okay to just keep the main door always open and let anyone squat and shit anywhere in the communal areas of the building because the tenants don’t have to assume the risk of the properties losing value because any potential buyer dislikes the smell of feces? Cool, cool, but then as a tenant what do you propose I do so my building doesn’t always smell like shit?
Imagine writing out something this unironically reductive and actually hitting the reply button.
SMH
No I mean that’s a real case scenario for me - what do you propose I do so my building stops smelling like human shit all the time? is suing my landlord the only course of action?
Legally heavily depends on where you live, many places have a step before that where there are legal bodies you can report them to for such things. You’d have to consult your city’s help line to get more info and figure out who you talk to about that.
Assuming that somehow doesnt get results then, yes, the next step is suing the landlord for your rent back, which can potentially go in your favor as legally in most places the landlord has a legal duty to maintain the building for the tenant and if they dont do that, you dont owe them rent and can get it back.
Whoever came up with this has never owned a house and has no idea how fucked up tenants can be
If you can’t handle it, sell your property. No one asked you to be a landlord. You’re not holding up the world, you’re just a parasite.
Ahh what I would give to be young and naive again
So you’re old and ignorant of Adam Smith and Marx.
I’m old enough to know how life works. I’m sure Smith and Marx will come in handy when your toilet clogs. Call a plumber LOL!
You don’t know how life or capitalism works if you’re never bothered reading the two seminal works on it.
It’s basic math. The tenant gives money to the landlord who gets the privilege of investing it. It’s one among the many one way cash flow systems of capitalism that cause this graph.
This has to be AI it’s so stupid
Ya serious? Like I don’t wanna just start throwing insults, but AI?!? Because it’s stupid??? Regardless of if what I wrote is complete brain rot or not, you linking it to AI because of it, is just completely baseless.
Just dude, read a book or watch the news from the last 20 years. Every year there are more millionaires while the wealth of the middle and lower class are either not changing or even god forbid decreasing. If you want something more sophisticated read a critique. It’s just not a system that can sustain it self indefinitely.
Here is a good starter for you: https://www.hup.harvard.edu/books/9780674430006
And because I know there’s no way in hell you’re buying a book based on an internet strangers opinion you suspect of being an AI. Here’s a pay wall free link too. http://digamo.free.fr/piketty14.pdf
Ah yes, my mom who ended up with 2 houses after remarrying (her new husband was terrible with managing finances so they decided to give the house and associated debts to her), barely scraped by financially, is a social parasite for wanting to rent out that other house because her new husband, after decades of physical labor, had become incapable of working full time and needed a way to have income later in life. Always had at least one tenant that was from hell in their own way btw and ended up selling the house to not succumb to the costs. Renting it out only caused losses.
Why is it some other family’s responsibility to support your mom. Why do someone’s children have to go without because of your adult mom. Why don’t you take care of her?
Ok, here’s an idea, get a company to rent it out for you, some even pay you while the place is vacant (for a bigger cut ofc). Or sell the damn thing and put the money into a savings account. Even the worst savings accounts will do wonders with the amount a property goes for.
Like I don’t want to insult your mom that has gone though hell, but that right there just seems fucking stupid.
Oh she definitely should have sold it from the start. Which directly goes against the claim that renting it out is totally risk free and free money.
Even after the sale it barely covered the associated debt and renovation costs after the tenants though. The housing market isn’t equally fucked everywhere. Even if selling it immediately the surplus money would not have been able to support my stepdad (who is now living on disability and social security with some financial support from my mom) for more than a few years. If renting it out had worked, it actually would’ve.
Why not get a company? Dunno precisely, probably because when money is that tight you don’t want to lose some to a company that does something that seems very doable by yourself.
It seems doable, until all the shit you described happens. After which the 15~20% cut (the kinda rates these companies want over here) doesn’t seem so bad anymore. Especially compared to the loss. A friend of my aunt had a tenant with some mental disorder that wasn’t able to find a job again after covid, yes that means 4 years of not paying, the landlady didn’t have the balls to kick the tenant out, and now the court proceedings might take another year. So yea, there is a risk, but only if you ignorantly chose to do it your self without knowing what you’re going into.
Yup, totally agree. Renters are ready to take advantage of anything you can offer. They will come into your house that you worked hard to rest up and they will wreck the bejisus out of it. Every weekend I was there fixing a clogged toilet, looking a wet floors and walls in the kitchen. Just looking at my first big investment rot away.
In the end I broke even and I got out of that business. That’s a single people sort of work. It feels much like changing people’s diapers. Like the renters I got blessed with were lazy lazy people.
But then what is said is very true. I bet they could not afford to own a house so they end up stuck having to pay most of their earnings for a place to live. It becomes this vicious cycle where they don’t care about the house and expect that the property will be repaired and always like-new for them. And unfortunately it’s just not. A house depreciates, gets old and breaks down the minute you start living in it.
My renting experiences were actually mostly positive. It’s the last renter I had that made me throw in the towel. My full time job takes me to a lot of high rise apartment buildings and I see what they go through. Most tenants are decent people but the few bad ones and their friends mess it up for everybody. I’m seeing very slimy property management companies from out of state buy buildings here because it’s relatively cheap. Crooked HVAC companies are just as bad. I wouldn’t want to live in most of the places I visit
If you have your landlord call the plumber and pay for the plumber and you expect that to happen faster than you could do it yourself(because you are working your own job), then it’s hard to argue that is not a value-added service.
If you break the toilet and now consider the property unlivable, due to a broken toilet, that isn’t the landlord’s fault nor the fault of the toilet. It’s your fault.
Accidents happen and your landlord should be cool about it, but it’s still your own accident.
None of this applies to natural causes like environmental damage, of course, but a lot of what happens to rental properties is caused by tenants.
If you don’t own it, it shouldn’t be your responsibility to repair it. The only circumstance in which you should spend money beyond the rent you already pay to fix something that doesn’t belong to you is if you broke it and your rental agreement doesn’t cover accidents. Homes require maintenance, lived in or not, and a homeowner can decide to neglect that at their own peril. If something goes wrong, it’s the landlord’s responsibility to fix it, not the person paying them for the service of having a roof. If they don’t they’ll likely lose a tenant and therefore income, so fixing their investment property is just required investment maintenance, the cost of doing business as a landlord.
I’m well aware many places have laws that touch on this subject, many of which have been heavily influenced by landlords.
This rent piggy has the right idea! You’re paying half your take home pay for the convenience!
There’s no reason to insult someone with a different viewpoint.
There is if you have no way to argue against their point. It’s like yelling at someone to “win” an argument. It often works.
Pay piggy is a term of endearment. Pigs are cute, and tenants are like pigs full of their hard earned cash and it’s all mine! Oink oink oink.
Huh? I’m agreeing with them though.
You’re obviously too stupid to ever own a house. If you ever do, please come back in 70 years to make sure you still believe that there are ZERO costs above rent that go into a property not even taking into account vacancies, damage, etc.
Haha, don’t delude yourself. I have perfect credit, no debt and more than enough savings. Walking into a bank and getting a big mortgage isn’t some special skill.
Lol, as if there aren’t countless companies that’ll happily do it for you for a relatively low cut. Some even offer vacancy protection, as in you get money even if no-one is there (for a bigger cut ofc, the ones here want like 20% or something). And if even that is somehow too hard for the landlords busy schedule, ya can just sell the property for a small fortune and put the money into a savings account and never work again. A landlord doesn’t need to do shit while gaining passive income, meanwhile tenants actively lose net-worth for the privilege of shelter, which is recognized as a human right by the way.
Then go buy your own house idiot.
Projecting much? Why do you think I know about this shit? I have my own place and my mom is using one of those companies to rent the flat she got after grandma passed. I’ma probably sell at least one of em for moral reasons once I inherit it, but that’s still some decades away.
Lol so you are what you hate. Got it. Inherited generational wealth as a landlord paying private companies profit off the backs of your tenants.
Troll gonna troll ey? Well I’m bored so I’ma bite.
Ya might wanna try visiting this thing called a primary school. They teach reading. My mom is renting out, and I plan to sell those additional properties once I inherit them. As you might guess, I and her don’t quote see eye to eye.
So you have no problem benefiting from the generational wealth and profits on an issue you obviously care so much about.
I’m done with this as you are fully stupid. Sell those houses or not, you’re a fucking hypocrite.
What am I supposed to do, burn them? As far I’ve checked no charity around me takes real-estate instead of money. If I refuse to inherit, it’ll go to someone else in my family who’ll just continue to rent. Tried looking up if I can give it to the state to provide as cheap housing, the only thing I found was unused government buildings for sale. So you tell me smartypants, I’d be delighted to be enlightened. But as long as you’ll just continue to throw insults my way, you’ll get the same back.
Say what you will about landlords, but fuck this meme format.
It still amazes me how people think these posts are solely referring to your specific uncle who owns two houses and not corporate landlords who own entire complexes.
It’s even worse when those corporate landlords have stipulations in the lease about not being able to repair anything yourself or you’ll be fined.
Meanwhile the property falls further and further into disrepair because even though I’ve put in 4 work orders about it they don’t care because all they care about is green number go up. Or you’ll get “Yeah we’ll send someone over at the time you specifically told us you’re gonna be at work. Also you need to be there when they show up or we can’t do anything about it 🤷♂️”
If all landlords actually properly maintained all their properties we wouldn’t be calling landlords leeches. But more often than not they put in the bare minimum and call it good.
I’m referring to both. 80% of rentals are owned by mom and pop landlords. They’re a much bigger problem than corporate landlords.
That’s fair.
In my personal experience it’s been the opposite but I know that’s just anecdotal/confirmation bias
