• 3 Posts
  • 35 Comments
Joined 1 year ago
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Cake day: June 22nd, 2023

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  • OK so you wanna go back to it then. Let’s say your three months in on a new rental home. Landlord may be averages $100-$200 per month profit, so reasonably they’ve only collected $600 in total profit from you. AC now breaks and needs a $10,000 replacement. Who pays? Have they collected enough money from you so that you are paying for it?

    At that point, you might as well start arguing that every business ever pays for things because of money, they’ve collected in their patrons. Same reason how you, assuming you’re a W-2 worker, get paid by your business. They collect a profit from the service or product they provide.


  • Yes, you are certainly right about that. The landlord or rehab investor making a profit was never part of my argument. Operating rentals or investing in real estate is a business like any other, and thus needs to turn a profit in order to continue operations. In order to address the point you are making, I see what you’re saying about the flow through and how that gets used to repair properties. However, you may agree that we would both look at a $10,000 capital expenditure on a new AC unit differently if we were renting a home, which is generally for shorter terms (perhaps 2 years in Austin, TX on work assignment) than resident ownership for life.

    If you are not someone who needs a rental home, or a rental apartment, then don’t use one. These types of businesses exist, however because they serve a need in society, hence their ubiquity. I invite you to consider the possibility that there is a valid reason for rental homes in many situations and areas that are beneficial for the right people. Yes, there are scummy landlords and yes, the landlord intends to make a profit, but this is not always at the sole detriment society.



  • Take the money from small projects like single family rentals and use them to fund larger projects by using leverage. That’s the only way cities and apartment buildings, or commercial spaces like shopping malls are able to be funded and built. Same as you taking money from a small thing (e.g working and saving a down payment) and using leverage to finance a new car. A profit is needed in these cases as it maintains incentive for maintaining homes and investing in the creation and rehabilitation of additional living spaces.

    The primary issue right now from my best knowledge is that there simply isn’t enough supply of homes and living spaces available, leading to increased demand, and willingness to pay a higher price. Investors partially solve this issue by funding new developments and high density dwellings like apartment complexes. If you ever take an economics class, you will learn the simple truth that the value of something is only up to what people are willing to pay. If demand is lowered, people, as a whole are less likely to pay for the price being asked, and the seller will need to continue lowering, and lowering their price to find what the buyer will willingly pay. This is part of the reason that we have the consequence of high interest rates at the moment as well.

    If rentals were useless they would not exist in a given market, but they serve a need.


  • Well, it sounds like you and I both agree that large companies like Black Rock, Zillow, and whoever else is involved in the alleged price fixing with that rent recommendation software thing are screwing society and yes, can burn to the ground.

    I don’t know enough to comment on rents going up outside of them, but generally, things like this come down to both inflationary pressures and a consequence of free markets. Some states have enacted regulations capping the amount that rents can increase, others have not. I may be wrong, but it seems that your perspective on the situation is simplifying the issue to mean that landlords are squandering resources (homes/units) and extorting people without providing anything. There is still a positive result to society in providing places for people to live. A profit is needed in these cases, though, as it maintains incentive for maintaining homes and investing in the creation and rehabilitation of additional living spaces.

    The primary issue right now from my best knowledge is that there simply isn’t enough supply of homes and living spaces available, leading to increased demand, and willingness to pay a higher price. If you ever take an economics class, you will learn the simple truth that the value of something is only up to what people are willing to pay. If demand is lowered, people, as a whole are less likely to pay for the price being asked, and the seller will need to continue lowering, and lowering their price to find what the buyer will willingly pay. This is part of the reason that we have the consequence of high interest rates at the moment as well.


  • So then who coordinates the work to get old houses fixed up? Who organizes and provides the funding, sources contractors, makes design decisions about how to best rehabilitate a home for modern use, and holds the whole project accountable for its completion?

    Across the nation and most of the rest of the world both resident owners and landlord owners will fix up properties. Unlivable properties however are primarily taken on by investors and rehab-to-rent landlords. Yes, they are making a profit out of it (most of the time), but society then receives an additional livable unit in good condition, or possibly more if it is a multifamily complex.


  • edit below

    Not one yet, I just understand how landlording and real estate investing works. Sure there are scum landlords out there, but what good do we bring the situation by demonizing an entire group, complaining online and cutting ourself off from the greater understanding of how things work and interplay in a complex society?

    This could apply to any news or situation. Have you ever considered that maybe there is more to understand than what you currently know? Have you considered the strength of the force that the way information is presented upon you can have on your perspective, attitudes, and beliefs about a situation? News articles have a tendency to use this in an effort to weaponize your emotions against something or someone, or to distract you from other causes.

    In this case, perhaps it has succeeded in manipulating your emotions to blindly attack me without fully and coherently understanding the situation.

    Edit: take these arbitrary downvotes for example. They communicate what is called a “social proof” to you that I am wrong, subverting your own free thinking and making potentially yourself as well as others stop and simply shortcut to agree the same.