In reality, you would have needed to own these rental properties for decades to have enough cash flow in them to make you enough to live on AND pay for their mortgages, maintenance, insurance, taxes, and property management. Even if you do manage to get a rental property, it will likely initially lose money. These people are likely selling something else, which is the dream of that life. So, they want you to buy their course or something. These people are all the same. “Let me show you how I make X passive income, by selling courses about making passive income.”
Agreed. I know people who own rentals and barely make enough to cover the cost of constant repairs. Rental properties are only lucrative if yer a piece of shit landlord. People probably make more money offering courses on how to do it than actually doing it.
Yea, this is what I was thinking. I have two houses and rent one of them. Both houses have a VA loan, but the rental of one does not even cover the mortgage for both.
That math is not mathing.
Of course I’m not charging insanely inflated rent, I just needed to move and decided to rent the old house for 2-3 years instead of selling it.
Not entirely true everywhere.
If you go into the poorest places in the county you can own apartments and have them paid for in no time. You can charge HUD twice the going rate and make life miserable for everyone by destroying the market in those areas.
Take where I live. The average rent in 2012 for a three bedroom, two bathroom home was 400 bucks. Now 13 years later it is 800-1000. Way higher than inflation.
How did this happen? Well, landlords exploited a program designed to help poor people by overcharging it and causing the rent to go up everywhere. Why rent to steady job Steve when meth head Molly’s check is always there because HUD pays her rent?
I know the three men who bought up all the property in this entire area.
One I know very well, so I’ll focus on what he did.
In 2010 he bought 3 apartment buildings for 115k each. They were all built by the same people in the 50s and are nearly identical with three bedrooms in each unit, but one of those bedrooms (in the downstairs apartments) has no window so can’t be categorized as a bedroom, only a closet.
So HUD pays 800 for the ones downstairs, 1,050 for the ones upstairs.
Each building has 4 apartments.
That’s 6300 a month for the upstairs apartments. 4800 a month for the downstairs.
That’s 133,000 a year for apartments he paid 115k for. The previous landlord only charged 200 a month. He has changed nothing about them. They were only fixed up enough to qualify for hud with the cheapest materials available. Nearly no upkeep. Pay a local drunk to redo the roof every few decades. Bam.
I’ve been living here for 8 years. I have nearly paid for the apartment myself.
How did dude get money? You guessed it. Dad helped him start businesses and everything grew from there. He has always paid his workers minimum wage and recently started selling off his businesses because being a landlord is easy peasy.
In the 8 years I’ve lived here, the only thing he ever had to fix was a leak outside.
Before he took it over, the entire building was on the same water and electric bill. First thing he did was separate all that so people handle their own bills and he gets as much as he can get.
NONE of the original tenants are here now. They all got priced out and replaced with easy money HUD recipients.
I’m the only one left who actually pays my rent in full. I’d say he’d be stoked if I moved out. I would, but I’m just too damn lazy and my upstairs neighbor is amazing. If she ever leaves it might motivate me.
I would like to say that many many outsiders have been buying up property here for the last decade and a half. They’re stopping now they they’ve made it impossible for us natives to buy a home.
This place is so poor that I almost had a house for 5,000 dollars in 2003. You could get homes crazy cheap here back then. That same house recently sold for 130k. It has been remodeled, but that was around 2009.
One county over things are still like that if you’re brave enough to live there. I had a problem once over there and had to call the police around 1 AM. “All of our officers are asleep at the moment, but if it turns out to be a big problem call us back and we’ll wake one up.”
You can charge HUD twice the going rate
You cannot just charge whatever you want. They aren’t morons. Often times the government offers below market rate in exchange for the guarantee you will be paid, regardless of what your tenant is doing.
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Using my “friends” to pay off a personal debt while making $250/mo in profit off them. See, it’s possible to be a good landlord, everyone!
Did you share any of what you made from the sale with your “friends” who helped you pay for it and kept it in good condition for you?
Did those friends run the risk of having to pay for a new roof or anything else that can go wrong with a house? Tell me you’ve never owned a house without telling me you’ve never owned a house
Don’t try to talk sense into the senseless.
It seems like it was a situation where everyone felt like they got a good deal and nobody felt taken advantage of. He gave them a better deal than they were going to find anywhere else.
To me, it doesn’t sound like he was exploiting his friends.
You still take someone elses money, just less of it.
Someone who needs a place to live in and doesn’t have the money or doesn’t want to buy their own place. IMO, it is a fair trade as long as the landlord isn’t a cunt. The reasons to why they don’t have enough to buy their own place have nothing to do with a single landlord, some people don’t want to take roots in a single place. If you wanna go to war with someone, go to war with companies, ban companies on owning and renting places, not people.
go to war with companies, ban companies on owning and renting places, not people with that I can agree. But taking money is still taking money.
By that thought everyone should be doing everything for free.
The incentive structure for landlords creates these conditions, it’s not some individual failing of their moral character. Individual tyrants aren’t better than corporate tyrants.
Not everyone is in a situation where they can or even want to own a house. Renting is much safer in terms of sudden emergencies. Water heater blows out in a house? Fuck you, 3k to replace at least. In an apartment? That’s a landlord problem.
So?
There’s a line to draw between exploiting tenants, and compensation for providing dwelling.
You might even argue the OP creates this ambiguity based on interpretation of the wording, or poor communication.
For a productive conversation, let’s be crystal clear where that line is drawn.
This is something I think gets left out, but understandably so when there are so many issues with landlords.
But, as a property owner, you’ve got all the liability and are responsible for repairs and ensuring that the property is livable and usable. I think there’s a level of compensation you can be earning from your time, but I think that having extremely high rent PLUS the ROI of your property increasing in value over time is double dipping. When you consider that your money is invested in property and you’re getting value that way, it IS leeching IMO if someone else is doing all the upkeep and paying a premium for that.
Looking at the OP that way shows that those people are just exploiting others. But I do think there is such a thing as ethical landlording. But I think generally we’re not there.
Can we not shit all over normal people for doing normal stuff? This dude doesn’t run Blackrock, he had a single rental property.
Hundred years ago it was normal to beat women of they were out of line. Millenia ago it was normal to own slaves. It’s also “normal” for the US Healthcare to screw over people who need Healthcare. Just because something is “normal” doesn’t mean it’s somehow right. Slavery was normal but then different societies over time understood that slavery is not right and it stopped being normal. Beating women used to be normal but over time we learned that’s also not right and it stopped being normal. I don’t know about you but I don’t think ripping people off is right. However ripping people off has been normalized for capital owners (including land lords).
Nobody should be wishing for his demise (compared to Blackrock and its kin, who I do think should cease to exist), but at the same time he shouldn’t be padded on the back for not ripping off his friend as much as he could’ve. What he did shouldn’t be normal.
He didn’t rip off his friend at all. He took just enough to pay the mortgage and save something up in case of repairs. That isn’t ripping him off. That’s doing him a favor since he charged him so little.
He could’ve given the rest money back to his friend after all the repairs were done. He chose to keep that money.
So given the equity to his friends?
No. Here’s what he could’ve done to not be a leech.
- sell the property
He no longer uses it so selling it to someone who would use it would be the best option. But maybe he’s sentimental about the place or has some other reason to keep it. Then it’s better if he “rents” it out.
- Get tenants but have them only pay for the utilities they use,no rent is paid.
He chose to keep the house, the mortgage on it is his responsibility not the tenants. Even if he just asked the tenants to cover the mortgage that is already leeching because you’re not using your money to pay it off, you’re using someone else’s. Once the mortgage is paid off he has a property he didn’t pay for while the people who paid got nothing. But let’s say he can’t afford to pay the mortgage but he still wants to keep the house?
- have the tenants pay thy mortgage as well, but nothing more.
Again, it’s his property whatever patch work it requires it’s his to cover. He’s already offloaded his mortgage to the tenants, why demand even more from them? But let’s say the tenants are scum of the earth and every day they tear the property apart, having the also pay to cover the repairs would reign them in.
- give back the money he took for repairs but he didn’t use for repairs.
He’s offloaded the mortgage on the tenants. He’s offloaded the maintenance cost to the tenants. The least he could do is give back the maintenance money he didn’t use. But he doesn’t even do that.
And yet, according to you, we’re supposed to think of it as him doing the tenants a favor because he’s not ripping them off more? Do you think a wife beater not beating his wife every chance he gets is doing the wife a favor? Do you think the slave owner not whipping their slaves is doing them a favor? Absolutely asinine.
Yea, and if he had just sold the property in the first place there wouldn’t have been a house to rent at all.
See, when the Landlord charges reasonable rates, and actually provides services in exchange for that rent (helping update appliances to newer, having paperwork on hand for any code/inspections needed for property changes (that the landlord would ultimately benefit from,) and in general treating it as a matter of ‘I have obligations’ instead of ‘I will do nothing but I will absolutely blame the tennants for the inevetable crumbling of the property.’
I dislike the concept at base level, but that is a someone who is trying to not be a scumbag.
The renting part isn’t even that bad, the owning part and selling for profit is the problem.
The renting part isn’t even that bad, the owning part and selling for profit is the problem.
What are you talking about? I buy a house for $200k in 2012, real estate market goes crazy and now my house is worth $500, selling it for market value iis… wrong?
Morally wrong, yes. But sadly normal…
Your “friend” still paid a substantial portion of your mortgage and gained nothing from it beyond being out of the rain. You used him and paint it as mutually beneficial.
How is a stable comfortable place to live ‘nothing’? If being out of the rain was all it took we’d all live in tents and this conversation would not occur. Owning a house and keeping it repaired/functional is hard and expensive. You don’t do your side favors by acting like our boy kept his friend in a locked closet when we all know that isn’t true.
Why do you get extra properties to rent out to others while he has to pay the rent?
The only reason why he doesn’t have enough is because people like you have too much.
We’re coming for you.
The only reason why he doesn’t have enough is because people like you have too much.
This should be satire.
I’m not going to argue with you. Shelter is not a commodity.
Of course it is. If it wasn’t, I wouldn’t be able to sell it, take the money and invest in something else.
There are too many people like you.
I’m trying to help you understand. You want to insult me, and make moral arguments outside the scope of basic economics.
Oh I understand. You’re the one doing the mental gymnastics to try and normalize a system that exploits basic needs as get rich quick schemes that just do happen to only be available to a select few that have the money to play. Even now calling it basic economics as if that system is inherent to existence.
That’s nice, but you shouldn’t have an extra property to rent out to others when there’s not enough to go around.
You made a profit from people who thought they were your friends. Classy.
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The appropriate criticism here is about corrupt markets resulting from restricted/scarce housing supply. Fair markets that encourage abundant housing supply, are ones that would lead to “perfect competition” and fair ROI on capital. The oligarchist/capital supremacy model of US/west corrupts markets against abundance, because extortionist profits fund politicians to protect extortionist profits.
UBI, not democracy, is the important freedom that can address structural corruption, but still the option to rent still needs to pay for the capital/expense investment in allowing you to rent.
corrupt markets resulting from restricted/scarce housing supply
Housing has a hard limit as there is only so much ground available in desirable locations. Building houses also needs resources and labor and takes a while.
We can go pretty high, but 3-5 stories has easier construction, and doesn’t need expensive elevator system. 4th and 5th floor without an elevator advantages young people, but reduced rent still can be profitable vs stopping at 3 stories.
I had to rant in a couple of comments because I drives me crazy when people defend leeching.
On a more constructive note: Housing cooperatives. I think they should be more widespread. Some people come together to build a house and then live in it for the cost it takes to actually support it. No crazy big apartments with a reasonable amount of people (roughly one bedroom per person), shared luxury such as gardens, in house shops, hell even a pool if you want. There is no leeching, just collective ownership.
What if some people do not fit into some pre-made construction of how some dictator imagines a “nice living situation”? Every person is an individual with individual needs. Presuming, that a single bedroom is big or small enough for every single person is absolutely undermining the fact of how diverse people actually are, as are their visions of their own lives.
Cooperatives are democratic, the members vote on what it means to have a nice living situation.
If there are ten people with ten different expectations, they would all vote for something, in summary/conclusion, “in the middle”, which would make nobody happy. The best would be, if everyone could choose for themselves and that is the case right now, except many people perhaps cannot afford, what they’d wish for. Still, better than having a “democracy”, where nobody is truly happy.
The case right now is, if you can’t afford what you want, you can’t choose it. They don’t get to choose for themselves, the market chooses for them!
If I have to choose between market decision making and democratic decision making, I’ll choose democracy. At the very least, a democratic process leaves no one homeless.
The market chooses without discrimination against anybody. Capitalism is inherently anti-racist, for example. If you do the work, you get paid. No questions asked.
In such a “democracy” it’s a different story. Because, for example, if you only have, let’s say, 30 tenants, every single tenant can move a lot through his vote. Now, it only takes a significant amount of these 30 tenants to group up as, for example, Trump lovers and there you have this “democracy” actively discriminating Biden lovers.
Whereas, if you meet a true capitalist, he does not care where you are from, what you do, how you look… As long as you pay, nothing else matters. Only your money matters.
That said, there is only a tiny fraction of people, who really cannot afford something, they actually want or need. Most people are capable to achieve stages in life, where they become very well able to afford, what they want.
The thing about most people is that, if they cannot afford it, they don’t wanna afford it.
For example, if you have no mental and physical disabilities and yet consciously decide to work as a lowly paid cashier for your whole life, then the market didn’t choose shit for you. You chose, presuming you are mentally and physically capable of choice, as the average person indeed is.
Any reason why we can’t just change the tax code to make this thing less viable? We disincentive things all the time. Like we can carve out exemptions for situations and things I’m sure but like, this shouldn’t be how to run a society.
Yep, easiest way to solve the housing crisis is a scaling tax on property ownership and rent. The first property you own is taxed relatively low, with it scaling exponentially as you add more properties.
Any reason why we can’t just change the tax code to make this thing less viable
Culture. Too many people think those who have more deserve more and those who have less deserve less.
It’s the same idea that made slavery so accepted in the South. Most Southern whites did not own slaves; they could not afford it. They still supported slavery because they supported the idea of owning slaves, that maybe one day they could get a slave of their own.
Same goes for why we have so many dirt-poor paycheck-to-paycheck useful idiots going to bat for their oppressors; they’re hoping that one day they can be the oppressors. Oh, and they don’t want to admit they’re being taken for a ride.
Until this culture changes, we shouldn’t expect things to get any better.
If you took every property that individual people owned and gave every one of them other people, we would still have a housing shortage with insane prices for a home. Shitty as most landlords are, the real problem is massive companies that buy up houses.
The higher the supply the lower the prices; we need higher housing supply. We need to reduce barriers to building homes and increase government investment in building new homes.
Around where I live they’re slapping up houses literally as fast as physically possible. The infrastructure of the county can’t keep up with the number of new neighborhoods and popping up. Traffic is insane and the schools are beyond busting at the seems. The elementary close to my house isn’t even 10yrs old and it has almost as many classrooms in t buildings as it does in the school itself. And house prices are still insane.
Question - is it unethical to be a landlord IF your only rental properties are garages in an area with plentiful and free street parking, and the land couldn’t be used for housing if the garages were torn down?
Step one: Have a shitton of money to buy property to rent out.
Oh, you don’t have enough money? Hhm, have you tried not being poor?it’s about suggesting that the social order that propped you up and elevated you basically arbitrarily based on birth is a reason you’re cool, and not just some shit that happened. none of this is about actually helping anyone. if they actually believed this shit from the bottom of their hearts, breathing a word of it would be fucking stupid.
The meme specifies Mortgage which means they also don’t have any money. They obtained a loan that they will be paying back for 15 to 30 years, at which point the property will deteriorate to a much lower value if any at all. If they sell the properties then they will owe depreciation recapture which works similar to a capital gains tax, as if it were additional income on top of the actual capital gains tax on the sale of the property itself. Plus closing costs to realtors.
Landlords don’t contribute to society
Quite the opposite in fact.
Yeah they contribute a lot of pain and suffering
Buy a home, don’t contribute to landlord’s profits.
Yeah, and buy it all cash so you don’t contribute to the banks profits. About as feasible for most, honestly.
Of course they do. Imagine that all of the landlords decide to start removing rental properties from the market if their tenants move out. What do you think that does to housing availability over the next 10 years?
Once the homeless population exceed police force, who’ll protect the landlords? Read some history before thinking about hyperboles.
I mean why not?
As a former property manager my motto was rent until you can own. I hate the 4 percent rent increase in la. Even if there’s more income it’s impossible for young people to save and I hate it.
ITT: People that have no understanding of nuance, or parasitism versus symbiosis. Some people actually find ownership to be bothersome, some people prefer leasing cars instead of buying, some people have good landlords, some other have shitty landlords. But let the hyperbolic nonsense fly and let’s nuke everyone and everything!
Most people renting are doing so because they believe the houses they can afford “aren’t good enough for them.”
The houses most people can afford would just get destroyed by police during encampment sweeps.
“some homeless people like living on the streets!”
Yeah I put that part about nuance for a reason.
I worked in the rental industry for a minuet, and I left because the people in the industry do not think of their renters as people. To property owners, renters are objects that you put in a property to make the property generate money.
Housing prices are pretty high in cities. But you can buy your own piece of land in a more rural setting and build a small cottage yourself, maybe a 2 bdrm, 1 bath home. I believe this is possible for less than $100k at the right location. Start with a used cheap RV or mobile home if you have to.
Trump deported all of the construction workers
I don’t support those deportations. But why not do it yourself?
I have a full time job which is entirely unrelated to construction. I’d get myself fired and then put the screws in the wrong place so the whole thing falls over
You’re fucking high if you think you can build even a small house for less than 100k
ITT: people who want free housing without understanding the costs of owning a house
Owning a house isn’t that expensive.
I own one. It’s so much cheaper than renting it’s not even funny. I could pay someone to do all the work I don’t want to and still come out so far ahead it’s not even funny.
Renting is a scam and only useful idiots and scammers defend it.
Owning a house isn’t that expensive. It’s so much cheaper than renting
The good thing is, people who don’t want to rent can buy. I highly encourage people to do exactly that.
Well I hope nothing ever goes wrong with your house’s roof or siding or HVAC or foundation or plumbing or electrical or…
Or maybe just quality, affordable, public housing?
Look at what Finland has done for an example.
Imagine that, people in the wealthiest nations in the world, wanting to meet their basic needs for survival with dignity. Ha ha ha, when will they ever learn, right my friend?
I remember looking up just the air b&b’s in the Portland metro and there were over 4,000……
A large majority of the rest were being rented.
The wealthy are buying it all with no regulation.
There should be one home per family in the suburbs. One vacation place and your house. No one needs 10 properties, get rich another way you greedy terrible fucks.
Rich people outbid regular folks for real resources (homes), taking away any chance at intergenerational wealth building. the only (legal) answer at the moment is taxation of the rich.
Gary Stevenson has some worthwhile insights on what we can do and how to convince working class people that the rich must be stopped or else your kids and grandkids will all be homeless renters.
inequality is sharply risinh all around the world. and it’s getting worse. this is arguably the most important issue of our time.
the only (legal) answer at the moment is taxation of the rich.
