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In cases where rent exceeds the mortgage, I think the reasons would be to cover the cost of capital, risk, and operational expenses. In this case, the long ter
by skt5 5y ago
In cases where rent exceeds the mortgage, I think the reasons would be to cover the cost of capital, risk, and operational expenses. In this case, the long term expected value of the property might be flat or growing at a lower than average rate so future expected gains can't be used to offset short term losses.
If this wasn't the case, in theory renters would just become buyers themselves.
- Red_Leaves_Flyy 5y agoRenters can’t become owners when multi billion investment firms are buying or own large percentages of the market. The market is incredibly distorted and inherently dysfunctional in its current state. Families should be living in housing they own our mortgage not paying someone else’s mortgage or profit to the investment class.
- skt5 5y agoI think we agree that when rent exceeds the cost of a mortgage one of the possible root causes is the cost of capital is high for the renter. Whether the cost of capital should be the same across different populations (in this example - the renter and investment firms) is another question.