If the property is giving you any kind of return, you’re extracting profit, so the property is less “affordable” than it would be if the resident owned it.
Not everyone is in a position to be buying a house at any given time, though. Providing housing at a less-than-the-very-top-of-the-market-value is still a necessary service that can benefit both parties.
The issue is the hoarding of that resource in certain areas, and the psuedo/full-on price fixing to max out returns
It’s true that it everyone is in a cash position to buy a house, but that’s made worse by housing being so expensive. And housing is expensive in part because of the hoarding and rent-seeking behaviors of landlords and investors. So renting is a “solution” to a problem it partly makes itself.
If people don’t have cash to buy houses, I’d look at that as a problem for lenders. Someone else renting out the house doesn’t necessarily have to be the only solution. I don’t think it’s possible to eliminate renting because we need some very flexible housing / short term housing.
But if we imagine a world where renting is incredibly restricted, perhaps to 4-unit apartments and up, instead of every single residence on the market, I think we would see a more affordable market where more people COULD be in a position to buy a house.
Yeah, that’s why I said we need flexible and short term housing. The trick is to make renting serve the needs of renters, because those needs do exist. Today it’s more about serving the profit margin of owners.
When I rented out my property, for example, I felt it was my responsibility, my job, to offer a residence where everything worked. I maintained the place meticulously and paid for every repair. However if you simply scan reddit you’ll see thousands of posts from renters who, for example, have a broken down refrigerator and will have to pay to fix it themselves. I find that disgusting - the landlord holds the renter responsible for anything that happens while they are there. So the landlord gets their monthly debt service paid for by the rent, plus profit, plus they enjoy to market appreciation, PLUS the renter is on the hook for all maintenance? Fuck that.
It’s a bit more complicated than that though. Most people can’t buy a property, because they don’t have enough money. In order to go around that problem, they either borrow money or rent the property. Either way, some extra money always goes somewhere.
Some of it is justified, because you need to go around the problem not having enough money to buy a house. However, there are many cases where that extra expense is absolutely wild and rooted in greed.
Actually, if you happen to own the property, some extra money will go to periodic maintenance and miscellaneous expenses you never even think of if you just rent the place. You just don’t pay for those things every month a little bit at a time. Instead, you pay a large bill once a year or an enormous bill every 10 years.
I’ve been a landlord and I know how it works. The liquidity problem you mention is real, but so is rent seeking. Landlords may help make housing available, but they absolutely do not help make it affordable. Quite the opposite.
Think about payday loans services. They help make money more available, but they make it as expensive as they can. No one believes they are providing a valued service at affordable. rates.
It’s possible to offer loans and rental housing at really reasonable rates, but that’s not what we have in our society. Investors and the wealthy buy up all the property, creating scarcity, this causes a price bubble which shuts out many buyers who get priced out. Then the renting begins, and I don’t know what it’s like where you live, but I couldn’t afford to rent the house I own.
If the property is giving you any kind of return, you’re extracting profit, so the property is less “affordable” than it would be if the resident owned it.
Not everyone is in a position to be buying a house at any given time, though. Providing housing at a less-than-the-very-top-of-the-market-value is still a necessary service that can benefit both parties.
The issue is the hoarding of that resource in certain areas, and the psuedo/full-on price fixing to max out returns
It’s true that it everyone is in a cash position to buy a house, but that’s made worse by housing being so expensive. And housing is expensive in part because of the hoarding and rent-seeking behaviors of landlords and investors. So renting is a “solution” to a problem it partly makes itself.
If people don’t have cash to buy houses, I’d look at that as a problem for lenders. Someone else renting out the house doesn’t necessarily have to be the only solution. I don’t think it’s possible to eliminate renting because we need some very flexible housing / short term housing.
But if we imagine a world where renting is incredibly restricted, perhaps to 4-unit apartments and up, instead of every single residence on the market, I think we would see a more affordable market where more people COULD be in a position to buy a house.
Interest rates are more of a significant variable. At 7%+ interest, renting will be cheaper.
There are other scenarios besides “not being able to afford to buy” that would make people lean towards renting.
Yeah, that’s why I said we need flexible and short term housing. The trick is to make renting serve the needs of renters, because those needs do exist. Today it’s more about serving the profit margin of owners.
When I rented out my property, for example, I felt it was my responsibility, my job, to offer a residence where everything worked. I maintained the place meticulously and paid for every repair. However if you simply scan reddit you’ll see thousands of posts from renters who, for example, have a broken down refrigerator and will have to pay to fix it themselves. I find that disgusting - the landlord holds the renter responsible for anything that happens while they are there. So the landlord gets their monthly debt service paid for by the rent, plus profit, plus they enjoy to market appreciation, PLUS the renter is on the hook for all maintenance? Fuck that.
It’s a bit more complicated than that though. Most people can’t buy a property, because they don’t have enough money. In order to go around that problem, they either borrow money or rent the property. Either way, some extra money always goes somewhere.
Some of it is justified, because you need to go around the problem not having enough money to buy a house. However, there are many cases where that extra expense is absolutely wild and rooted in greed.
Actually, if you happen to own the property, some extra money will go to periodic maintenance and miscellaneous expenses you never even think of if you just rent the place. You just don’t pay for those things every month a little bit at a time. Instead, you pay a large bill once a year or an enormous bill every 10 years.
I’ve been a landlord and I know how it works. The liquidity problem you mention is real, but so is rent seeking. Landlords may help make housing available, but they absolutely do not help make it affordable. Quite the opposite.
Think about payday loans services. They help make money more available, but they make it as expensive as they can. No one believes they are providing a valued service at affordable. rates.
It’s possible to offer loans and rental housing at really reasonable rates, but that’s not what we have in our society. Investors and the wealthy buy up all the property, creating scarcity, this causes a price bubble which shuts out many buyers who get priced out. Then the renting begins, and I don’t know what it’s like where you live, but I couldn’t afford to rent the house I own.