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The bay area is one of the worse places to have rental properties in the country though in terms of ratio of rental income to mortgage costs. If it wasn't for
by bcheung 6y ago
The bay area is one of the worse places to have rental properties in the country though in terms of ratio of rental income to mortgage costs. If it wasn't for appreciation most would sell instead of try to rent out homes. Landlords aren't making their money from the rents, they are making it from the appreciation.
- notSupplied 6y agoIf a landowner is having trouble making a profit on rent due to high mortgage costs, that just means that the wealth was captured by the previous owner via a high sale price. So the point still stands that a disproportionate amount of wealth is flowing to land instead of capital or labor.
- bcheung 6y agoAppreciation is not rent seeking though. Also, savings is what funds capital investment. There's no capital without previous profit.
- CountSessine 6y agoAppreciation is not rent seeking though. It most certainly is, if at the same time you're hanging out at city council meetings protesting construction and housing development. The cost of housing in SFBA isn't really the cost of land - its the cost of regulation. It's the marginal cost of building new housing.
- throwaway201103 6y agoYes, in a competitive market, rent is your cash flow. It pays recurring property taxes, maintenance, and interest. It's a cliche but you really have two opportunities to make money in rental property: when you buy, and when you sell.