4 ms·
They don't have to turn a profit from the rent. Many operate at a loss in a bet to build wealth from equity gains.
by rcpt 6y ago
They don't have to turn a profit from the rent. Many operate at a loss in a bet to build wealth from equity gains.
- amelius 6y agoSo the landlord has to sell the property to make a profit? That may not be the best outcome either for the people who rent it.
- dredmorbius 6y agoHELOC
- loloquwowndueo 6y agoHIC! THANKSC FORC POSTINGC!
- dredmorbius 6y agoHELOC, HELOC again[1]: https://en.wikipedia.org/wiki/Home_equity_line_of_credit https://en.wikipedia.org/wiki/Home_equity_line_of_credit (As The Cars might say: https://www.youtube.com/watch?v=N3mjTpZk3Ao https://www.youtube.com/watch?v=N3mjTpZk3Ao)
- cko 6y agoThere's levels to it. If they bought the place cash, then the only thing they have to cover is the property taxes and maintenance. They are still getting a return on investment, but it's like 5% per year (assuming property values track inflation). You can see this in denser metros, where they put more cash down, thus reducing their returns. If they bought it 20% down and want to cash flow for a goal of 8% cash on cash, that's another type of return on investment. If the property value tracks inflation, their return is probably closer to 20% yearly. Also they can shelter that income through depreciation, mortgage interest, expenses, etc.