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This is sort of an unreal conversation to be having. If you buy a house to speculate on housing prices, and then rent it out, _you aren't adding anything_. Th

This is sort of an unreal conversation to be having. If you buy a house to speculate on housing prices, and then rent it out, _you aren't adding anything_. That's entire point of the phrase "rent seeking". You've dumped capital into a limited-quantity good and then extract rent as it becomes more valuable. The only exception is those actually expanding the housing supply (which is hugely valuable and should be rewarded!), but this is a tiny tiny fraction of the housing stock! Most commercial real-estate is not any housing-add over if they didn't exist!

vineyardmike 6y ago
It is true that speculative housing ownership does this, but the flip side is that many people can't actually afford a house (but can afford rent, eg. due to down payment costs), or don't want to own (moves cities often). In larger multi-tenant buildings, the average person wouldn't buy, and the landlord provides services, like maintenance (and sometimes in gyms/etc in higher end buildings). Sure those services can be purchased on the free market anyways, but bundling is pretty common in business.
procombo 6y ago
Where I'm at they can't build houses fast enough. Overall it's a bad market because home owner's are more motived to borrow against their property value (heloc, etc) than move. And everyone else is kinda stuck. I own several rental units. Only freestanding homes. I definitely see myself as providing a value add. I fix things when they break, provide landscaping, provide housing to great people with not-great credit. They don't have to worry about a bunch of different utility bills. All value adds. And I take on plenty of risk where lenders don't want to. I don't get compensated all too well for it either. It's a very active way of investing long term, you may not see the value of, but it's definitely there. I could easily charge 40% more in rent right now, as could many.
hahaxdxd123 6y ago
Insane that you've been downvoted for this. Land value capture is literally THE example of economic rent. Adam Smith identified it in a little book called Wealth of Nations...

vineyardmike 6y ago

It is true that speculative housing ownership does this, but the flip side is that many people can't actually afford a house (but can afford rent, eg. due to down payment costs), or don't want to own (moves cities often). In larger multi-tenant buildings, the average person wouldn't buy, and the landlord provides services, like maintenance (and sometimes in gyms/etc in higher end buildings). Sure those services can be purchased on the free market anyways, but bundling is pretty common in business.

procombo 6y ago

Where I'm at they can't build houses fast enough. Overall it's a bad market because home owner's are more motived to borrow against their property value (heloc, etc) than move. And everyone else is kinda stuck. I own several rental units. Only freestanding homes. I definitely see myself as providing a value add. I fix things when they break, provide landscaping, provide housing to great people with not-great credit. They don't have to worry about a bunch of different utility bills. All value adds. And I take on plenty of risk where lenders don't want to. I don't get compensated all too well for it either. It's a very active way of investing long term, you may not see the value of, but it's definitely there. I could easily charge 40% more in rent right now, as could many.

hahaxdxd123 6y ago

Insane that you've been downvoted for this. Land value capture is literally THE example of economic rent. Adam Smith identified it in a little book called Wealth of Nations...