Reason I’m asking is because I have an aunt that owns like maybe 3 - 5 (not sure the exact amount) small townhouses around the city (well, when I say “city” think of like the areas around a city where theres no tall buildings, but only small 2-3 stories single family homes in the neighborhood) and have these houses up for rent, and honestly, my aunt and her husband doesn’t seem like a terrible people. They still work a normal job, and have to pay taxes like everyone else have to. They still have their own debts to pay. I’m not sure exactly how, but my parents say they did a combination of saving up money and taking loans from banks to be able to buy these properties, fix them, then put them up for rent. They don’t overcharge, and usually charge slightly below the market to retain tenants, and fix things (or hire people to fix things) when their tenants request them.
I mean, they are just trying to survive in this capitalistic world. They wanna save up for retirement, and fund their kids to college, and leave something for their kids, so they have less of stress in life. I don’t see them as bad people. I mean, its not like they own multiple apartment buildings, or doing excessive wealth hoarding.
Do leftists mean people like my aunt too? Or are they an exception to the “landlords are bad” sentinment?
No raindrop thinks itself responsible for the flood.
I’ve never heard this phrase before and I love it.
Quit exhaling! We have a climate crisis!
“Landlords provide housing like scalpers provide concert tickets.”
https://lifehacker.com/why-everyone-hates-landlords-now-1849100799
That said, I do think there need to be ways to rent housing rather than buy it, since many people need that flexibility. Looks like the answer to that might be community land trusts?
Or public housing
What a magnificent comparison!
It’s all.
Buying a house as an “investment” is what we call “scalping” in other businesses. Not to mention the fact that this type of buying worsens housing prices and increases homelessness for personal gain, even on a small scale.
The only exception I can give is people who rent out part of their own home, as this situation actually creates available housing.
Exactly. Housing is finite and other people live here too.
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Buying a house as an “investment” is what we call “scalping” in other businesses.
Actually, it’s called capitalism. Buying anything and selling it at a profit increases prices. Strange… but true.
An increasing number of Americans are beginning to see the problems inherent in capitalism.
Indeed. And it’s been fascinating to see the logical inconsistency of “landlords bad but capitalism good”.
Every house that is owned for an investment contributes to the high price of housing. People shouldn’t own homes if they’re not going to make them a home. It’s unethical in my view to hoard real estate.
This is a genuine question: what’s the difference do you think between investments in general and real estate investments? I mean, technically investing of any kind is hoarding. It may not have such direct impact on basic needs, but it surely does overall.
When landlords “invest” in the housing market, they are not making the system of providing housing for people better or more efficient. They are buying up a limited supply of properties that exist in desirable areas and then charging people for the right to use them plus a nice profit for themselves. This reduces the supply for a necessary good and drives up prices, making it profitable for landlords, and a massive, efficiency draining, example of rent-seeking for the system as a whole since the landlord’s basically don’t work and instead take a cut of what everyone else makes doing useful work.
If you invest in some predatory companies you might be investing in companies that do that, or might do some other predatory practice, but you can also just be putting money into a business so that it has more money to grow its operations, or invest in some new efficiency that makes them run better, and that then both returns a profit back to both of you and helps improve the system as a whole.
Think about it this way, when you retire, you are going to need money to sustain you for a long time after you stop being able to work, so while you’re working, you need to save that money up. That money can just sit in your bank account doing nothing for anyone, or you can invest it in a business that lets them use those resources now and lets you get your retirement money back 30 years from now when you need it (though in reality that’s spread across hundreds of companies to reduce risk). That’s how investment can be a net benefit to society and make for a better use of resources, characteristics not present with landlords and housing investments.
Note that I am playing devil’s advocate here in order to tease out some of the nuances in people’s thinking because I believe it’s important for us all to understand the details and I’m not convinced many have thought it through. Hence the knee-jerk reaction to downvote
They are buying up a limited supply of properties that exist in desirable areas and then charging people for the right to use them plus a nice profit for themselves. This reduces the supply for a necessary good and drives up prices…
This describes any financial transaction in a capitalist system.
but you can also just be putting money into a business so that it has more money to grow its operations
And how is this different from buying a product like a house and renting it out? Would any such distinction apply to, say, renting out a car or renting out your services? And “renting” a product isn’t really different from services or a cycle of buying low and selling high for anything other than the terms of the contract.
or you can invest it in a business that lets them use those resources now and lets you get your retirement money back 30 years from now when you need it
So like investing in real estate. For years that was considered kind of the gold standard of “safe” investments and generally providing a net annual return of about 5%.
That’s how investment can be a net benefit to society
I’m not convinced any investment can be a “net benefit” to society in a capitalist system. But proponents of renting out property argue it provides a “net benefit” by providing a needed service (housing) to those that aren’t themselves in a position to buy. It is inherently usurious, just like everything capitalist.
So for me, bottom-line, the only valid argument to support making a distinction between real estate “investment” and other kinds of “investment” is to say that housing is a basic human right. And if you are going to go there, why not make other things human rights like happiness, a life free from financial stress, a life of fulfillment. From my perspective that leads to the inescapable conclusion that capitalism is inherently inhumane and thus any kind of investing is immoral.
This describes any financial transaction in a capitalist system.
No it does not. If I pay you to build a water desalinating machine then suddenly we’ll have an abundance of fresh water. We’ve increased the available supply of drinking water overall.
Similarly building more housing is not as morally bankrupt as buying up existing housing and renting it back out at a profit. If you actually build more housing, you are providing a service; if you only get paid for the hours you work, you only make a reasonable amount of money, and you do a good job, you might actually be net benefit to society as a whole, as you are increasing the available supply of housing for people.
On the other hand when you live in a city where there is a limited supply of housing and you buy that up and rent it back to people at a profit so that you don’t have to work, you are simply draining the system of resources.
There is a reason that economists literally use the term ‘rent-seeking’ to describe behaviour that is personally profitable while draining the efficiency of the system as a whole, and not all types of businesses (and thus investment in them) are considered to be rent-seeking.
Oh yes it does.
We’ve increased the available supply of drinking water overall.
And then you charge up the wazoo for a basic human right.
On the other hand when you live in a city where there is a limited supply of housing and you buy that up and rent it back to people at a profit so that you don’t have to work, you are simply draining the system of resources.
Ah. It would appear you believe that somehow buying a property and renting it out does not require financial risk and effort like any other product or service. Renting out housing, despite frequent appearances, requires maintenance and expenses in order to reap a profit. What you are describing would more accurately describe investments in stocks or bonds which do not require anything but capital on your part.
" economists literally use the term ‘rent-seeking’ to describe behaviour"
Except those same economists argue that renting out housing is productive. And that’s not in fact the origin of the term. The classic example, according to the wikipedia is charging money for boats to pass a section of river. The term does not refer to housing, which requires a reciprocal exchange - you build or buy the house and maintain it and in exchange you are paid for it’s use.
To repeat because I have to: I’m not arguing this is good. I’m arguing that a distinction between types of capital investment cannot be made. You can say landlords are universally bad but other types of capitalists are good, universally or otherwise. It’s the same damned thing.
Edit: I sometimes wonder if people think houses are like rivers because they haven’t owned one. They are a huge pain in the ass and require a lot of expense and effort.
No, not all investment is the same. look up the difference between rent and profit.
Ok, so do you have a 401k? Any kind of retirement savings? A bank account that earns interest?
If so, how is that different, or at least acceptable for you than any investment?
You might think I’m trying to be sneaky here or trap you in some way. I’m genuinely not - just trying to understand your perspective and thinking about how folks such as yourself might choose to function given our inability to effect wholesale change in our capitalist system.
Edit: For you downvoting sheep out there, see my comment above for context on why I ask these questions.
I don’t think a bunch of people pitching in to fund a company is in and of itself a bad thing, but there are several considerations that are extensions of that that stray into unethical territory. foremost is the matter of fiduciary responsibility. When a company is publicly traded they have a legal responsibility to put money in the investor’s pockets, and that shapes the behavior of that company in ways that can be very harmful. Intent shapes action, and the imperative to provide profits to investors changes whatever intention that company may have had when it was founded. It means if the company has a choice between fulfilling that imperative or doing something to reduce harm to the world around them they will always make the decision that fulfills the intention. Where if your intention is just to be the best at something, or to provide a service, you would make a different set of decisions. The biggest example that’s particularly central in public consciousness right now is the health industry. Health insurance companies have the ability to ensure that their customers are well taken care of and that healthcare is accessible, but providing healthcare isn’t the point. Providing profit to their shareholders is the point, so in every situation where the profit, and the doing the right thing, conflict they will always choose the former because that’s the whole reason they’re doing it in the first place. Even if the CEO wanted to lead the company in a more ethical direction they couldn’t do so without courting legal action, if the investors believe their decisions aren’t maximizing profits. Multiply this by time and companies gradually become worse, even if they started out great. Enshitification isn’t just for the internet. Often this leads to unethical ends, as in the health insurance example where it causes thousands of deaths each year. A lot of it depends on whether the demand for something is fixed or elastic. Say you wanted to purchase a lot of something as an investment, if that thing is FunCo Pop figurines and you’re hoarding them banking that they’ll increase in value due to scarcity could be sold later at a markup. People can take or leave FunCo Pops, They can choose not to spend their money on your marked up collectibles. Hoarding them would be a dick move, but not necessarily unethical. If the thing you’re buying up is water the landscape changes. People need water, every single person needs water. That demand is not elastic, people have to have it or they literally die. If you hoarded that resource so that you could sell it at a higher price, and that prices some people out of being able to access water, it’s more than unethical. It’s straight up wicked. Your intention isn’t to provide water. It’s to maximise your profits, and thus your decisions will always be guided by those priorities. It’s nuanced. But not very difficult to understand. The world could change for the better, but the profit margins are too slim to make it a worthwhile goal for a savvy capitalist.
So tl;dr investment can be for good or can be for ill. I’d argue any investment ends up prioritizing profit over any ethical concerns no matter what they say. As you say, in essence: Profit motive does that. Venture capital demands it.
A society is only good as it’s incentives. Because there will always be a segment of the population that will only act when incentivized. How they act is determined by what is incentivized and what is not. We’re a society with a long list of really bad incentives. I agree with you that investment always prioritizes profit over ethical concern because we live under capitalism and that is what is expected and incentivized. The sad thing about capitalists is that they often argue against social programs because they think that people will always game the system, and it’s true. But there is a name for those people, and that name is capitalist. When they say things like “capitalism is just human nature” and that it’s natural to compete and try to gain the upper hand in all situations, they tell on themselves. It’s not human nature, it’s their nature, and they project themselves onto everyone else. I don’t think that capitalists will ever truly go away, that’s why we can’t seem to have nice things. Any society we create will have some capitalists in it. Some people are just competitive. And capitalism is a way of keeping score. It’s not true of all people, but it’s true of some. Enough to cause trouble. Any advanced society we may one day have will need a sort of pressure valve for capitalists that will allow them to feel like they’re gaining the upper hand over their fellow man. Without a way to indulge those impulses they will always undermine any collectivist society they find themselves in. They’re just something that needs to be managed. Investment can be innocuous, or it can be evil, it is almost never good. In the rare case that good does come from investment it is short lived because capitalism is corrosive. The intent to win at capitalism will always determine the decisions capitalists make, so over time everything good they create will ultimately turn to shit.
… there will always be a segment of the population that will only act when incentivized
I’d argue that this is true of all the population but with the stipulation that “incentives” do not need to be monetary. I completely agree that capitalism is not human nature and feel that we’ve essentially brain-washed people to believe that money and material possessions are the reward when in fact it’s all the other things in life that actually matter. I believe that this thinking, which had lots of good reasons for existing during times of scarcity and paucity of resources, can be undone eventually. I think in a post-scarcity world (I’d argue we’re there) where it is normal for people to live fulfilled lives in significant comfort free from financial and work stress those few people who can’t shake the need to competitively accumulate will be rare indeed.
Until then we have a huge problem: we have too much highly efficient prosperity for capitalist models to make any sense at all.
Yes, I’m thinking of fully automated luxury communism.
And thank you for your thoughtful comment. I enjoyed reading and thinking about your perspective.
Yes. You shouldn’t be allowed to have a second house to rent out. The problem is limited supply in a given area, and if everyone buys a second, third, fourth house (or townhouse) then there is no supply left for people that want to actually buy to live in that house. Frankly I think it’s unethical. There are plenty of other ways to invest your money.
I also don’t think this position is limited to leftists, although yes the leftists here have a very dramatic take. I think anyone that thinks about this should see the problem.
Who is allowed to rent to the people who don’t want to buy?
Should the city own property just for that and run it as a non-profit?
Yes. The ability to have a place to live should be a basic human right and therefore be affordable.
If that means the government* subsidises it for the low income families (as in owns them and rents them at below market value), so be it.
We used to have “council houses” in the UK for exactly this purpose, but in the 70s, Thatcher came up with a “right to buy” (at a decent discount) and then made two mistakes - there were no restrictions after buying to stop you selling to anyone else, and there was no building of replacement stock after they were sold. So the result 50 years later is that there are nowhere near enough council houses any more, and a lot of the old ones are privately owned and being rented out at market rates, which are (depending on the area) very expensive.
*local or national, I don’t really care which
If that means the government* subsidises it for the low income families (as in owns them and rents them at below market value), so be it.
Not everybody who doesn’t want to buy is low income. I’m too lazy / risk averse to maintain everything myself, so I happily pay my landlord a reasonable premium to bear the risk of shit burning down (or breaking in less dramatic ways) for me. I also like that I would be able to pack up and move without worrying about selling my old place. I might change my mind later on, but right now I’m good.
Why should governments subsidize the lifestyle choice I’m consciously making?
To be clear, I wasn’t trying to say ALL rental housing should be subsidised, just that there should be a healthy supply available for local councils to make available to people who need it based on whatever criteria they set for that.
Even when I was renting, I’d earn too much to qualify. People with young children would take priory over single people. That sort of thing.
It’s not a perfect system, but it’s better than companies gaming the system to maximise profits at the expense of the most vulnerable.
Yes, that’s ideal. In Germany (where there is a culture much more oriented towards renting than owning) there are a lot of state run landlords and they are great to rent from, reasonable rents, reasonable to deal with (in the local context), etc. And of course they have good laws to protect tenants to back it up. Not necessarily a perfect system but definitely one the rest of the world can learn from. Unfortunately things are still heading in the wrong direction there too right now.
That’s not true in any big city. While the laws keep the landlord madness limited, real estate and rent prices are out of control because of speculation, and there are tons of horror stories to go around - and by experience, I would say they are even more common with individual landlords than with large companies, at least large companies don’t usually do anything obviously illegal and have less venues to make their tenants homeless.
Yes, I’m talking about the state owned companies versus both private companies and individual landlords, rents with the state owned ones are like 20% or more lower than the others and they are usually more responsive to fixing problems, don’t play too many games
But I totally agree rents are way out of control the last few years
For houses? Essentially no one, houses should not be for rent. Apartments in my mind are fine to rent because you can build a fuckton of apartments on a small amount of land. But there can still be a problem if there aren’t enough apartments available to buy.
Owning property isn’t a job
Unless your aunt is transferring equity in those homes to the tenants based on the amount they pay in rent, then yes, she’s a leech. “Providing shelter” isn’t the service your aunt is providing; she’s just preventing someone else from owning a home.
And before anyone says “but renting is all some people can afford, they can’t save up enough to make a down payment” - yes, sure, that’s true. But that’s a symptom of the shitty housing market (really the shitty state of the middle class in general*), and landlords aren’t making it any better by hoarding property, even if it’s “just” 3 to 5 townhomes.
People who don’t want to buy a home at that location would still need a place to live. Someone needs to rent it to them. Until someone comes along to create government housing or whatever, this is the best we can offer as an individual.
On the topic of transferring equity, how much is reasonable equity? Why not rent at cost instead of charging more and giving it back in a different form?
People who don’t want to buy a home at that location would still need a place to live. Someone needs to rent it to them.
I don’t understand what you mean by this. No one needs to rent anything to anyone, if resources are distributed fairly.
On the topic of transferring equity, how much is reasonable equity? Why not rent at cost instead of charging more and giving it back in a different form?
If a renter pays the same amount of money as the landlord pays towards their mortgage, and the renter has paid rent for as long as the landlord has paid the mortgage, the renter should have as much equity in the property as the landlord does.
I don’t understand what you mean by this. No one needs to rent anything to anyone, if resources are distributed fairly.
But resources aren’t being distributed fairly.
If a renter pays the same amount of money as the landlord pays towards their mortgage, and the renter has paid rent for as long as the landlord has paid the mortgage, the renter should have as much equity in the property as the landlord does.
That’s a rather arbitrary rule. You would still need a bunch of stipulations on top of that to make sure it’s fair to the renter.
Assuming you do have all the right rules in place, what makes this setup more desirable than simply renting at cost?
Just so we’re on the same page, we’re still talking about OP’s question, right? My definition of parasitic requires being a net negative to the “host”. The threshold between parasitic and non-parasitic is at net neutral for both parties, and we’re discussing where that line is.
But resources aren’t being distributed fairly.
Right, because the system is broken.
That’s a rather arbitrary rule.
It’s basically co-ownership, which is already an established way to buy and own a property.
Assuming you do have all the right rules in place, what makes this setup more desirable than simply renting at cost?
At the end of your lease, if you choose not to renew, you still have equity in a property which is worth something, rather than ending up with nothing in the current system.
Just so we’re on the same page, we’re still talking about OP’s question, right?
The relationship between a landlord (parasite) and a renter (host) is absolutely a net negative for the renter*, because at the termination of the relationship, the landlord ends up with much more than they started with (equity in a property + profit from rent) and the renter ends up with less than they started with (lost money in rent payments).
Right, because the system is broken.
Exactly. So what’s not to understand? A broken system means problems exist, and you can do things to compensate for those problems. Things that provide value to others. Now, we can go into what it means to “need” something and whether we ever actually “need” anything, but that’s a whole other discussion and not the one we’re here to have. In this context, “someone needs to do X” means that doing X provides value to someone else.
It’s basically co-ownership, which is already an established way to buy and own a property.
Co-ownership refers to the ownership structure, doesn’t it? I’m talking about the threshold you proposed for the landlord-tenant relationship to not be parasitic.
the landlord ends up with more than they started with (equity in a property + profit from rent) and the renter ends up with less than they started with (lost money in rent payments).
And I’m saying it doesn’t have to be that way. Do we at least agree that if the landlords sets the rent at $1/month, then the transaction will be to the benefit of the tenant? And if you set it to market rates, then it benefits the landlord. There exists some middle ground between $1/month and market rates where it’s a net neutral.
Do we at least agree that if the landlords sets the rent at $1/month, then the transaction will be to the benefit of the tenant?
No. A tenant never gains anything once the terms of the lease expire. The property owner is the only one that gains, as long as the price of rent is a positive number.
once the terms of the lease expire
I feel like this is the main point of contention. No, you’re left with no new physical assets after spending that $1. But why is that a problem? Not everything is about physical possessions. If you purchase a meal and eat it, you’re left with nothing at the end of the meal. If you pay someone to move an old couch out of your home, then you’re left with nothing after they’re done. If you pay a taxi to drive you home, you’ve again gained nothing physical at the end of the transaction. But in all these cases, you’ve gained something, or else you wouldn’t spend your money there.
When you pay a landlord for shelter, you’ve exchanged some sum of money so that you’re protected from the elements and live to see the next day. Similar to buying a meal and eating it.
You are incorrect. The service is providing someone a home if they don’t want to own their own or if they don’t have the financial means to do so
No landlords hoard property. The property is used by people.
No landlords hoard property.
Fine, landlords hoard property ownership.
The property is used by people.
As long as the landlord permits it, and as long as the landlord gets their premium.
Landlords profit off of permitting people access to shelter, a basic right that any human should be entitled to. It’s literally modern day feudalism.
Renters hoard property rentership.
You have to actually consider what the other person is saying if you want to have a productive conversation. Being snarky or just responding with memes and cliches only distracts from the point being made.
No, landlords earn money by providing a service. Properties don’t maintain themselves.
Taking away the opportunity of home ownership is not a service.
So let’s say a landlord sells their property and somebody else buys it to live in.
Where do the original renters live now?
Or in a rental property, who is paying to maintain it if the landlord is not charging above their mortgage costs?
Or why would a landlord take on the risk of loaning an expensive asset to somebody at cost knowing they may not get paid? Or the boiler stops working and they have to spend thousands fixing it without any risk to the tenant?
If their rent went toward equity in the home they were renting, when the landlord sells, an equitable portion of the cash made during the sale would go to the renters. Ideally, the renters could then use that nest egg of cash to put a down payment on a home.
If a person is paying money for access to and upkeep of a particular home, I think it’s very fair for them to build equity in that home proportional to what they pay in rent. If landlords find that too risky or not lucrative enough, well, they don’t have to be landlords.
So let’s say the landlords don’t want to do this and sell up, or at least try to… who can afford to buy now? Yes the prices will come down but that doesn’t remove the need for a deposit/downpayment - yes that will be smaller but how is somebody going to save that money still? Where do they live while doing that? That is still the biggest problem… the UK does have a help to buy scheme where the government owns part of your property (acts as deposit) and you pay the mortgage on the rest, but you also pay some rent to the government for their share.
The whole system needs overhauling to make it work these changes alone won’t sort it out.
That’s not what rental property owners do. They provide housing, not take it away.
Builders provide housing. Landlords are nothing more than a middle man.
Builders build housing. Then they sell it. Rental property owners provide housing.
It’s not nice to call people leeches, esp. if you really don’t know anything about them.
What is a person who made good (or lucky) decisions and made enough money to be comfortable in the present but not so much to retire supposed to do with their money?
Give it to you instead?
Sure, billionaires and X00 millionaires don’t need to exist, but so far as I can tell “leftists” are a .ml / tankie crab bucket. Fuck me for having more money than you but not enough to take the homeless off the street as is my obligation. Please tell me how to keep leftist virtue so I can have ~30 upvotes to retire on.
I don’t understand. You think the only two things one can do with excess money is buy real estate, or give that excess to me? I’m flattered to be sure, but there’s a whole lot of other options out there
She should kick out her tenants and then rotate living between all 3 properties, thereby no longer being a leech.
i don’t know how anyone could survive without at least three properties. it’s a life necessity
I agree, there are lots of options. I’m asking you for the leftist allowable top list.
If I put it in the stock market and make money for nothing, I’m a parasite. If I buy a vacation house and rent it the other 2/3 of a year I’m not using it, I’m a parasite. If I save it and suddenly accrue more than some magic limit, then someone is on the street and I don’t liquidate to them I’m a Taylor Swift parasite.
So I’m asking you: What am I allowed to do with extra money above and beyond what I need to survive the winter, pay for my healthcare, and house myself and my family? 🤔
I’ll let you know after the next leftist meeting lmao.
Real talk though, save it, donate it, or spend it. Burn it for all I care. Just don’t buy real estate you don’t plan on living in.
Do you agree with my spending assessments? I don’t think it’s quite so cut and dry as you’re laying out
I appreciate that there is not an annual meeting of all leftists, and I honestly consider myself a lefty except for this weird fetishisation of how money can be spent by middle class people. It’s nonsense.
I think your spending assessments are exaggerated for effect, but ultimately sort of the embodiment of “there is no ethical consumption under capitalism”, a leftist slogan that, while maybe oversimplified, I mostly agree with.
I’m not fetishizing anything though. I’m just saying it’s unethical to profit off of your ability to deny access to a basic human need.
I wasn’t exaggerating anything except the bank account limit.
There are plenty of locations where owning an extra residence is not denying a basic human need, and more to the point there is a level of “wealth” that is basically the whole run of 6 figures to 7 figures where you probably can’t retire, you can cover college for kids, and you’re on board with most leftist concepts. On that train yeah it does sometimes make sense to buy property. I hope one day to afford something like that. But I refuse to see a place that is mostly safe to park money while the next president lights stuff in fire to put me on the same level as rental companies buying every property on the market.
Ideologies tend to sort people into a limited number of overly simplistic categories. This makes theorising easier but applying it to reality much harder.
Very few people could live in a capitalist system and remain pure. e.g. My pension fund is invested in the stock market so I very partially own thousands of companies. I’ve also purchased a small amount of shares in selected companies, a situation I had more agency in creating. Sometimes I subcontract work to other contractors who function as my temporary employees. And so on.
Is there an ethical way to try and ensure that I will have food, shelter and medical care as I age? In the US we can’t depend on the government safety net. Everyone isn’t as able in their 60’s and 70’s as they were in their 30’s and 40’s, so assuming that I’ll be able to work and make a reasonable income the rest of my life is wildly optimistic. Anyone working at a job for 30+ years shouldn’t be stressed about survival but that’s not reality. Putting money in a savings account at a credit union is good but I don’t think that will move the needle. Any decent pension or retirement plan is gonna put money in the stock market. Even with passive investing in index funds, you’re on of the stock holders that fucks like that UHC CEO was trying to appease. Given the state of the economy in the US today, buying and renting a duplex, triplex or small apartment building might be less evil than owning random stocks.
I would argue that nobody should own a home they don’t actually live in. All renting out does is increase the housing cost overall because nobody would ever operate at a loss or to break even. This is the issue people have with say, Blackrock who buys hundreds of homes at a time and rents them out.
Your family aren’t bad people but the business they decided to take up is inherently bad by design. If the law changed tomorrow saying all multi homes must sell to non homeowners, everyone would watch prices drop and be able to afford it.
Using homes as an investment is at its basics, exploiting a need by interpreting it as a want or practical goods. Homes are for living in. The housing industry views homes like commodities as if people have a wide choice and selection when it’s really “Omg we can afford this one that popped up randomly, we have 12 hours to decide if we want to pay 50k more to beat others away” and then lose anyway after bidding to Blackrock who pays 100k over asking.
Homeowners also treat their home as an investment. Which also makes housing more expensive and inaccessible. Moving away from renting is not the solution, we need a more comprehensive change in the system.
The context here is quite different; in other words, you got an apples vs oranges issue here. A single home owner does not expect to profit from that investment; the increase in value is more of an insurance than anything (mortgages are taken out to cover emergencies, or the increase in value provides the means to move to a new home, etc). So, again, the context is extremely different.
Besides, if the expected inflation in value were the issue, shouldn’t I expect increased wages to make up the difference? I.e. no, that would not contribute to making the housing market too expensive for the average person to find accessible.
A single home owner does not expect to profit from that investment
What are you talking about? People definitely buy homes as an investment so that they can sell it and retire.
increase in value provides the means to move to a new home
What is this, if not profiting off an investment?
What are you talking about? People definitely buy homes as an investment so that they can sell it and retire.
That’s insurance. The “profit” goal is not to rent seek or enrich themselves. And in this market it’s a risky gamble, anyways.
If the so called profit is intended to be entirely consumed to take care of moving or retiring, it’s insurance to allow you to move or retire; it’s not profit you add to your income. It’s not even properly described as “profit” since it’s, by definition, unrealized gains.
These are not circumstances where you “cash out” and buy something fancy, or even pay your day to day bills. Context matters.
it is not possible to have a property as an investment, without screwing someone else over. So yeah, her too.
The landlord charges enough in monthly rent to cover mortgage, house maintenance, and provide profit. So the argument about it being a service to tenants is BS as the tenant could afford this on their own.
Landlords rely on the credit system for denial and cost of entry into property ownership to exploit tenants.
Houses aren’t investments, so yes.
Tell that to my mortgage.
For the record I own exactly one house, it’s in terrible condition and I don’t have the funds to renovate. Because of the mortgage.
In this case, your debt is the investment
For me it’s an investment in freezing my housing costs. I bought 8 years ago and since then the increases in my housing costs have been around 5% as taxes go up. In the same time period, rent for the apartment I was in previously has gone up 65% and is higher than my mortgage payment. Had I not purchased a house there’s a good chance I would have had to either move in with family or move to a much cheaper area.
We arent a homogenous group, but ill tell you my personal opinion.
I trust you when you say your aunt is not bad, but what she is doing is bad (and i am sure she is unaware of it). Those 3 to 5 houses she bought are 3 to 5 houses that families cant buy. A few bad side effects:
- It lowers the housing stock in the area, so artifucial scarcity brings the prices up artificially.
- It seperates families from their communities. When your children grow up and have famailies ofbtheir own, they cant afford to stay in the community and are forced to leave
- The families that do stay and are forced to rent arent building any equity for their children. In effect, it stunts upward mobility.
There are people who do want to rent, and people whoneed to rent, but that should happen in priperly dense apartment building designed specifically for that. When houses meant for families are snatched up to profit off of, it is parasitic.
I get it, they are just trying to survive. They are playing the game that exists. Thats why i personally dont belive that most landlords like you are describing are bad people. I think the ultinate issue is that out elected officials do nothing about it. It should be illegal, or have tax implications that discourage the practice.
There are people who do want to rent, and people whoneed to rent, but that should happen in priperly dense apartment building designed specifically for that.
Who are you to say what people should or shouldn’t rent. Should all renters be piled on top of each other in over packed buildings with 600 square feet to themselves? Why can’t I rent a 2000 square foot town home for my family so that they are safe while I save up to buy my own home?
And say I rent a townhome for 10 years, then buy my own townhome, then 10 years later I rent it out to someone else while I buy something bigger? What’s wrong with that.
I think what we all have a problem with is housing affordability and a lack of systematic focus by the government on eliminating poverty.
The issue isn’t some small time landlord with 5 condos, it’s the investment groups with 5000 condos which artificially juice the rents year after year.
It’s insulting to say that all of the poor people who cannot afford to buy a home should have to live in densely packed buildings.
Rent for single family properties is higher than the mortgage of that same property. In theory. So ideally no single family property should be rented as its purely a parasite relationship. Again, in theory.
The problem is that isn’t always true in practice with today’s market and rules. because if the previous owner has had their mortgage long enough, then it could be quite a lot less than a new mortgage. That makes a situation where rent is higher than their old mortgage (providing landlord profit), but cheaper than a new mortgage (providing a valid choice to a renter).
But many of us argue that the current situation is unnecessary and drives up overall market costs. Even when done by just small landlords, it all adds up because the system allows it to.
So its not so much telling you what to rent and what not to rent. its more that in a better system, you wouldnt ever choose to rent that way. Mortgages on small or attached single family homes would just be cheaper and affordable like they were in the past. And if you needed even less costs, renting would be the option in actual properties designed for it. Whether that is sardine packed 600 sqft, or not.
Rent for single family properties is higher than the mortgage of that same property. In theory. So ideally no single family property should be rented as its purely a parasite relationship. Again, in theory.
The problem with this theory is that it’s wrong across the board.
Take a look at houses on realtor dot com or the like… they show estimated mortgage and also estimated rental value. Single family homes typically rent for far less than a new mortgage on the same property, partly because housing prices are so inflated and partly because as you pointed out, someone who got a mortgage on a property 10 years ago who is renting it out now may be renting it out based on the cost of ownership 10 years ago.
Secondly, your conclusion doesn’t follow even if your premise was correct.
Let’s pretend sfh rental prices were higher than the cost of a new mortgage on the same property. How would that then translate to ‘people who can only afford to rent shouldn’t be allowed the dignity of living in a sfh and instead should have no other option but to live in a shared housing environment… how does that follow? How could you possibly think the answer is an increased limitation on what people can rent?
The real solution is getting rid of corporate ownership of more than say maybe 20 properties at a time.
I would certainly prefer having hundreds of thousands of small time landlords with 5 or 10 properties, as opposed to dozens of billionaire corporation who each own tens of thousands of properties… be they sfh or condos or whatever is irrelevant.
Its wrong in the current market, yep. But if we didnt have inflated housing from various factors including parasites and empty housing from those billionaire corps and small time landlords, things would be generally more affordable across the board like they were in the past.
With the bar for ownership lower, that rental line shifts too. And suddenly the concept of “starter homes” is back on the menu like it was only a few years ago. And maybe we could get some smaller homes being built again to meet that demand.
Last thing i wanna say is that specific rental options don’t have to be shitty. I was lucky to have snuck my early adulthood right into this mess as it formed. I saved up for my starter house (which i am now stuck in seemingly forever due to this market, but i know i am also lucky) by renting, but i rented an 1000 sqft private entry apartment with good quality. I felt plenty dignified in there. And there are options even better of course. Some people only want to rent forever afterall. Townhomes in particular are more suited for that style of renting. Nothing against that. But also, sardine packed buildings have their place. If someone is that rough off, i’d assume they prefer that to being on the streets. The issue is even those buildings have been royally fucked by today’s market. Those 500sqft apartments shouldn’t cost more than my current mortgage, but they do, and that’s insanity.
I dont think the apartments should be small, ive lived in apartments for most of my life. Msxing out square footage is also a shitty developer tactic, but thats another story
Yes all landlords.
This is incorrect.
All landlords, regardless of how many properties they rent out, are ultimately producing nothing. They sit on property and leech money off of the economy. The scale at which it is done does not change the core “product” (which isn’t a product at all, in the traditional sense, because it is not produced). It’s a classic grift.
So, yes: all landlords.
Edit: in some sense, all forms of “passive income” follow the same pattern. Capitalism relies on money being exchanged for goods and services. Passive income is a perverse adulteration of that. Free money is not a thing.
Not everything people pay for produces a tangible object. For example, people pay to hear someone play a song. People pay to hop in an Uber to get from point A to point B – they don’t own the car they ride in afterwards.
People pay for services and there’s nothing wrong with that.
Renting is not a service. It is a passive income.
People playing a song or driving a car for someone else are performing a service.
Of course you don’t own the car when you get an Uber. Not sure the point of the comment.
Edit: I’ll also note that hedging on this issue of passive income is one reason why the wealth disparity in the US is so astronomical. If we treat passive incomes as services, we ignore the fact that they produce value from nothing. Every dollar made from a passive income came from an active income.
Passive incomes like property rental also make it exceedingly easy to contribute to generational wealth – one more way that wealth gap gets wider.
We must stop pretending that housing (and healthcare) can work using traditional business models.
I guess it really depends on whether or not the landlord is a slumlord or not.
Home ownership is not easy. Homes and properties require constant care and maintenance, for those who care about them. Having two properties can easily eat up 2-3 days a week, year round.
Absolute bare minimum I put at least $10,000 into my house every year, and that’s if I do all the work myself and nothing major breaks.
Paint, decking, siding, roof, furnace, plumbing, electrical, lighting, exhaust fans, yardwork, insulation, windows, doors, cabinetry, appliances, replacing sewer lines, cleaning french drains, gutters, etc etc. They may not all need work in the same year, but they do all need work and some of those jobs are a major time and money commitment.
To say property ownership is a passive income is ignorant at best, but more likely disingenuous. If it’s truly passive, it’s only passive for a short period of time before the costs catch up to you and your “investment” is ruined.
Providing rental housing is a service. It’s a job, like being a waiter or a flight attendant.
Note that being a waiter or a flight attendant requires activity which directly affects the client – just like other services. Not true of landlords.
Owning a property and renting it out does not intrinsically equate to providing a service. In fact, the only activity one has to do (in many cases) is collect rent, which is a service to the landlord only. Landlords can offer services – improving the property, for example (though it’s a service which does also benefit the landlord) – but this is not intrinsic to property renting in the way of any service you mentioned.
And it certainly isn’t a job, in the traditional sense of having a boss and a schedule etc. I guess in some sense it is closer somewhat to independent contracting, except that you ultimately get to kick out your “clients” if you want to, and you don’t have to do anything they ask. Even by that interpretation, it’s money for nothing. “Job” suggests effort.
I assume you’re about to try and claim that paperwork and government hoops that landlords may have to work through means that they must, by definition, be a service. And to that, I would say: things that give you income are meant to require effort. But I’d gladly take over the paperwork for my landlord if it meant I didn’t need to keep giving him half of my active income every month for doing literally nothing, and I don’t think I’m alone in that at all.
You are mistaken regarding the activities that landlords do. And the lower the income of the tenant, the more work the landlord has to do.
Paperwork and dealing with government bureaucracy is part of the job.
Landlord activities directly affect the “client” which is the same in any service industry.
Being self employed still means having a job. Some people only know what it’s like to be an employee. They don’t know the ins and outs of running your own business. Perhaps that’s why you don’t understand the job of being a rental property owner.
Free money is not a thing… Except for people who do nothing that anybody wants to trade for money, and then it’s their entitlement and fuck everyone else?
And yes everyone deserves housing, food, healthcare, and a shot at happiness. But taking something for nothing on the backs of people with more to offer than you and then being an ungrateful dick about it saying you just deserve it is pretty off-putting. Let’s all share and make sure everybody gets a shake, but JFC be gracious and say thank you if you are on the take of the system. Putting money in real estate by a college campus is not the same as buying up every new house on the market in an area, I just want a place to put my money that isn’t going to go tits up before I can put my kids through college.
Some people don’t have shit to offer society, and some of those people ARE rich. Some of them are not rich, and gotta have a big fucking pair of nuts to throw around words like “leech”.
I just want a place to put my money that isn’t going to go tits up before I can put my kids through college.
Tbh I generally empathize there, but it’s a bad argument for passive incomes. It sounds like the claim is about an unstable monetary system, not that landlording isn’t a passive income. If you don’t like that your money isn’t safe, that’s one thing – but different from this thing.
“Leech” is selected because they suck blood, which (figuratively speaking) is exactly what passive incomes do to other people, in particular for things like housing. It is a strange claim to say that “everyone deserves housing”, but then to hedge it by claiming some people have a good excuse to take advantage of a broken system. You’ll find far more landlords taking “something for nothing” than you will tenants.
So where does the money go then?
It’s leeching to landlord. It’s leeching to put it in the market to get passive income. There’s some magical point where it’s too much money to keep in a bank account by either FDIC or people saying “bro there are homeless folks on the street!”
If you have money in any quantity, it makes no sense not to put it to work. I can take it out and out it in a mattress in my house for safe keeping, but functionally that’s stupid. There are plenty of people who aren’t trying to screw anybody who have more money than makes ends meet AND are onboard with the same causes, but for some reason we gotta do a scarlett L if they put it in real estate?
For the I have less than 1M but more than 100K crowd, I don’t know what the general population of this thread expects. This is the wealthiest most of us can ever hope to be. It’s not by any means fuck you money, but it sure gets fuck you treatment.
All fair points.
I don’t think there is a good answer to this question. But if we agree that the system overall is broken (which maybe we do?), then we should expect things like this. There isn’t a good answer because the system itself is broken.
Why is it broken? Because things like passive income have been accepted for so long. Because regulation has gone out the window and corporations can do whatever they want. Because we have a real estate mogul as President-Elect. Lots of reasons to point to.
RE “fuck you treatment”, I’ll also mention: I do not believe that every landlord taking advantage of passive income is ill-intentioned. As you have alluded, there are reasons which don’t involve wanting to take part in, ultimately, limiting access to housing. The grand trick of the system is convincing good people that those reasons are not endemic, and that they don’t ultimately support the interests of the overlords.
I think we can absolutely agree to the fact that the system is broken.
I would love help to fix it, but I have to operate in it for the time being. I even want to play on the leftist team, but I find it pretty unsatisfying though to get spit on by the rest of the team you know?
This post really kinda summarizes it for me. Regular people trying to make it? Nah fuck em. You’re the same as big asshole real estate. Man that sucks to read and it makes me indignant. It’s a totally shit thing to hear when I’m ready to give something for nothing because people just deserve it, you know? I don’t even own a second property and it makes me salty.
All I want to do is save so I can help my kids through college and maybe buy a house where they can have a flat piece of ground for a swing set and to throw a ball around. If I can give extra I will, but dammit threads like this really want to paint people like me as assholes.
I do not prefer it.
I your Aunt and Uncle are probably lovely people. They’re trying to survive in the same system we’re all stuck in.
Ask yourself this, who is paying the mortgage on those properties? If the renters can afford the rent, they can afford the mortgage and then some. Your aunt and uncle, and all landlords, are collecting a premium on housing, what do they actually provide? If they’re trying to save for retirement, by renting homes, who’s actually paying for their retirement? Will those people be about to afford to retire if they’re spending so much on rent? They’ll end up with nothing when they leave. Your aunt and uncle will still have 3 to 5 extra properties.
They own suburban townhomes, in some cases you find a renter who’d rather not own a home. In most cases, the market has progressed to a point where home ownership is impossible because people are hoarding homes and withholding access for rent.
It’s an unethical system. Your aunt and uncle are small line landlords and a symptom of a larger problem. They’re participating in an unethical system to gain an advantage, and it’s hard to blame them for that. That doesn’t make it ethical, or good.
Jefferson said he “participated in a broken system that he hated.” In reference to slavery. He actively tried to reform that system and was rebuffed. He’s still seen as a slave holding landed gentry today, and it remains a black spot on his (admittedly spotty) legacy. How are the people who owned 3 to 5 slaves different from those who owned 50? How are they compared to those who could afford and benefit to own slaves, and still advocated for abolition?
Owning your place to live should be a right. Anyone who holds more housing stock than they personally need and who will only let it out if there’s profit on their investment (because if it’s an investment, then there is an expectation that the line must always go up, which is also very inflationary), tightens the market and makes it harder for other people to become a home owner.
The big difference between renting and paying of a mortgage, is that by paying off the mortgage, the home owner has build up equity and secured a financially more secure future. But if someone is too poor to get a mortgage to afford the inflated house prices (inflated because other people treat it like an investment), then in the current system they pay rent to pay off the mortgage/debt of their landlord and after the renter has paid off their landlord’s mortgage, they’ll still be poor and without any equity themselves.
It’s a very antisocial system. And with landlords building up more and more equity on the backs of people who are unable to build up equity themselves, there’s a good reason why landlords are often said to be parasitic.
You assume that everybody wants to own and that just isn’t the case.
I assume that everyone who wants to own a home wants to own a home and many of those aren’t able to. That’s the current reality.
Edit: I reread what I said and I distinctly said that it should be “a right”. Having a right to do something is not the same as having an obligation to do something. Imo home ownership should be a right for everyone, but that doesn’t make it an obligation.
and I distinctly said that it should be “a right”
Yes, you did, but you said it as part of an answer to the question “why are landlords considered parasites?”, and you explained that those who own more homes than they can live in are parasites. The logical conclusion (would be that it should be outlawed to be a landlord.
So, how am I to understand that? Should there be a quota, an acceptable amount of parasites so to speak?
Heavily tax buying and owning homes as investments. Also heavily tax vacant homes in regions with a housing shortage.
Basically regulate it so that prospective buyers who are buying a place to live in are significantly advantaged when trying to do so, while at the same time discouraging others from buying up those homes as investments.
I’m 40 and have friends my age who rent because they don’t want to own even though they can afford to. I’m not sure what percentage of renters are like them.
We can worry about that when there’s a lack of places to rent and homelessness is down.
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People own apartments too. If you can’t own more than one home, surely apartments would also be covered by that?
