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Historically, the S&P grows faster than housing prices. So if you tie up a ton of capital in a property, the reduced growth + property taxes mean it's likely losing you money (not to mention any interest paid on a mortgage). Renting it out makes it a viable investment (and obviously it depends on where you buy).
Now, whether or not investments should be allowed for things which are basic human needs is another question.
Something I always felt was missing from this argument is the leveraged amount of the mortgage. In the stocks my $100k might make 10% annually, but with a house I’ve used that $100k as a downpayment on a $1M home and I’m making the 10% (minus say 3% borrowing cost) return on a much higher number than the physical money I had.
Not to mention in the states how mortgage interest is tax deductible? I’m not American, that seems like a crazy advantage to homeowners.
A landlord who does jack to properly maintain the property is a parasite.
Doing all the repair and maintenance yourself IS a job. Heck, managing and paying the contractors to get it all done is a job.
That job is called property management, and many landlords contract that out.
Landlords definitely have a place, predatory landlords, no.
Indeed. A lot of people aren't in a situation where they want to buy and maintain a house, so having a healthy rental market is very important for every country.
But rental markets should be regulated to ensure everyone can find affordable housing without being taken advantage of.
Sure but how are they regulated is my potential issue. There is so much cronyism that could make it worse. Then only ones that give money to certain politicians will get the good landlord gigs, political opponents will get the boot. You would need an independent board in every area that knows the local housing situation intimatly and not career politicians either. These would have to be regular folks that would probably need to be voted in, not appointed. Or maybe nominated by local residents.
I don't think it has to be that complex. Here in the Netherlands, we have a system that non-luxury houses get points and the number of points determines the maximum rent.
It's not perfect, but for many decades it worked quite well.
A reform is now being proposed to extend the system to middle class housing.
Complex and subjective systems are risky, precisely because they provide opportunities to cheat.
Simple is best.
Simpler is always best but we have 41 states that are larger then the Netherlands. That is a wide range of markets.
Exactly. There are always going to be people who take advantage of others for their own personal gain. It doesn't mean that everyone who owns property and rents it out is an evil scum bag.
It's kind of both. The investment of capital to provide useful services is a business. Hoarding a limited resource in order to speculate on price appreciation and charge others for access is parasitism.
I can't afford to sell my house and I have to move... So I'm renting it out. Am I a baddie? To be fair, I can only afford to rent where I'm moving.
I'd say no because you're giving out space in your own home and presumably have taken responsibility for its maintenance yourself.
Where it'd begin to ascend into you being an exploiter is if you began to acquire new properties for the explicit purpose of collecting rent off them or to sell them after renovations for a mark-up.
You're not, try not to worry about it. The system is screwed up.
I'm a reluctant landlord too. In this case it's an inheritance that I'm letting someone rent until they are ready to buy, so I don't really consider myself a true "landlord".