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Charging rent does have economic value. Example: a retiree, using his retirement savings, purchases an apartment building. Now, he has a steady income, that he
by runeks 10y ago
Charging rent does have economic value.
Example: a retiree, using his retirement savings, purchases an apartment building. Now, he has a steady income, that he can use to pay for his expenses indefinitely -- as opposed to knowing he will run out of money at some point. The tenants benefit as well, because they have little savings, but an income instead (because they are still able to work, as opposed to the retiree). By exchanging income for wealth, the tenants and the retiree mutually satisfy each other's interests without harming anyone.
- tsunamifury 10y agoRent is almost always higher than a mortgage payment but that requires a downpayment (i.e. not being poor) -- thereby they are saving less than if they can own. Basically the point of this article -- poor people who have to rent are subsidizing this retiree's retirement... its profitable.
- runeks 10y agoAn income is not a profit (capital gain). Retirees aren't profiting from their ability to convert their wealth into income, they're simply surviving. I'm not talking about rich retirees. I'm talking about hundreds of millions of people all over the world, who've saved up something and therefore, when they come to the point where they are unable to work, they purchase an asset with a yield -- it can be anything: a bond, shares in companies that rent out apartments, stocks, land lease etc. -- in order to convert their savings into an income. The more your savings, the higher the income, but when you are no longer physically able to work, you have no choice left (unless you're lucky enough to live in a country where there's someone to help you). Also, who do you think is the recipient of mortgage payments? People who've deposited money with the bank in question, eg. retirees. A mortgage is an exchange of wealth for income using a bank/credit union as an intermediary.