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> I'm not sure I see the problem. I don’t see why only parked properties are a problem? Rentals are always more expensive than the underlying mortgage - that’s
by yunohn 5y ago
> I'm not sure I see the problem.
I don’t see why only parked properties are a problem? Rentals are always more expensive than the underlying mortgage - that’s what makes it an investment opportunity. This is a big problem since most people could’ve afforded the original property if they weren’t priced out by investors.
- leetcrew 5y agothere are a few ways this could not be true. the mortgage could have been locked in a long time ago at a much lower valuation. the rent would still be above the underlying mortgage, but that doesn't mean I would have bought the house when I was a child. the landlord might own the building outright, or the valuation might be increasing so fast that the rent only needs to offset the rent. either way, the rent could be pushed below the mortgage (or what the mortgage would be). there are some us cities with extremely high price-to-rent ratios. some of those properties must be renting for below the underlying mortgage.
- yunohn 5y agoThe higher valuation now is exactly the problem. It’s not connected materially to the property value, rather the speculative investment value the market is giving it. This doesn’t change my point that renting needs to be profitable to happen, and the proof is in the pudding/reality.