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That's only the "happy path" (for the landlord) story. I had a coworker who enterprisingly rented his old apartment to someone, who ended up squatting and forci

That's only the "happy path" (for the landlord) story. I had a coworker who enterprisingly rented his old apartment to someone, who ended up squatting and forcing him into an expensive and drawn-out litigation. The tenant absolutely abused him and the California law which favors tenants quite strongly. He was a young guy in his 20's, not rich, and that woman really hurt him. And of course there are other risks too; can you imagine being an entity that owns lots of commercial for-lease real-estate right now?! They must be scrambling to stop the bleeding, since Covid has sent demand into the earth. My point is that being a landlord is not without risk, and it's not always an "I do nothing and make money by leveraging your fear of homelessness" situation (although, granted, this is the ideal state landlord's seek, which is itself kinda gross).

rogy 5y ago
good? landlording isn’t and shouldn’t be pitched as a risk free investment strategy. I’m glad some landlords have finally realised this.
Beldin 5y ago
> since Covid has sent demand into the earth. This needs more context. Around here, it's nigh impossible to get a place. Social housing has waiting lists for over a decade, private renting is more expensive than a mortgage, and buying a house requires you to overbid. There are (plenty) stories of folks overbidding 50k€ and still not getting the house. If you can afford to buy a house, buy it, divide into subunits, charge 80% of mortgage to each of the 5 subunits. Anyway, that's what tge housing market looks like here. So I'm guessing your experience is from elsewhere.
- javajosh 5y ago
  Perhaps you missed the word "commercial" - which means renting to businesses, rather than individuals. Covid has increased WFH a lot and many small businesses are going virtual, and even larger businesses are scaling back their physical offices. This has the net effect of driving down demand for office space.
  - shkkmo 5y ago
    It's a bit confusing since you discuss commercial properties between two paragraphs discussing housing rentals. It isn't specifically clear that your comment about low demand only applies to commercial properties.
majormajor 5y ago
> My point is that being a landlord is not without risk, and it's not always an "I do nothing and make money by leveraging your fear of homelessness" situation (although, granted, this is the ideal state landlord's seek, which is itself kinda gross). Yep, that's the problem, at least in the US. Ideally we'd reduce risk on both sides. Rent control wouldn't have to hurt this - your tenant's rent doesn't go up much, but your mortgage isn't going up much either. It's not like small landlords are in position to redevelop and increase density anyway, so I'm skeptical of arguments about housing stock if you limit the upside (and downside!) of small private landlording. It's often pitched as the most productive investment strategy for the middle to lower-upper class. Get one property, leverage it into a second, leverage more rents into a third, etc. Even in tenant-friendly states! Yet it's literally just rent-seeking and landlords riding along a wave of demand that they help create (by leveraging their properties and rent to acquire more) to squeeze higher and higher rents out of people is not particularly economically productive overall. Covid is the first real blip I can remember that's hit those landlords so hard, but the truth is many of these people are over-leveraged and were in a precarious position to start with given the risk. Let's say there were no eviction bans: they could evict all these folks not paying their rent, and ... try to rent out the units to the people that got evicted by other landlords? Because they couldn't afford the old market rate in the first place? Doesn't that just depress the rental market even more?
- klipt 5y ago
  > Yet it's literally just rent-seeking That's not the economic definition of rent seeking. > and landlords riding along a wave of demand that they help create Demand for owning, yes. But for renting they create supply, not demand, in effect helping lower rents.
  - majormajor 5y ago
    > Demand for owning, yes. But for renting they create supply, not demand, in effect helping lower rents. No supply is created by person A buying a rental building from person B. Person A paying a higher purchase price does nothing good to the rents charged in that building. Yes, there is no lobbying or current manipulation of the government, but for small landlords it's often just a game of "I want to take advantage of population increasing over time to make more money over time" coupled with "I want to take advantage of other people improving the economy so that I can charge higher rents as incomes increase." Neither of those are productive, and the latter is hard to avoid calling parasitic. They don't have the ability to redevelop into higher density, or often even do much to change the condition of the property. So you get small mom-and-pop rentals in SF or similar places that charge far higher prices for far shittier units compared to those put on the market from larger developers or management companies in, say, Marietta, GA.
rcpt 5y ago
> old apartment > California Prop 13. Your friend is doing just fine.
humaniania 5y ago
Why would you care about the risks of being a parasite on vulnerable people?

rogy 5y ago

good? landlording isn’t and shouldn’t be pitched as a risk free investment strategy. I’m glad some landlords have finally realised this.

Beldin 5y ago

> since Covid has sent demand into the earth. This needs more context. Around here, it's nigh impossible to get a place. Social housing has waiting lists for over a decade, private renting is more expensive than a mortgage, and buying a house requires you to overbid. There are (plenty) stories of folks overbidding 50k€ and still not getting the house. If you can afford to buy a house, buy it, divide into subunits, charge 80% of mortgage to each of the 5 subunits. Anyway, that's what tge housing market looks like here. So I'm guessing your experience is from elsewhere.

javajosh 5y ago
Perhaps you missed the word "commercial" - which means renting to businesses, rather than individuals. Covid has increased WFH a lot and many small businesses are going virtual, and even larger businesses are scaling back their physical offices. This has the net effect of driving down demand for office space.
- shkkmo 5y ago
  It's a bit confusing since you discuss commercial properties between two paragraphs discussing housing rentals. It isn't specifically clear that your comment about low demand only applies to commercial properties.

majormajor 5y ago

> My point is that being a landlord is not without risk, and it's not always an "I do nothing and make money by leveraging your fear of homelessness" situation (although, granted, this is the ideal state landlord's seek, which is itself kinda gross). Yep, that's the problem, at least in the US. Ideally we'd reduce risk on both sides. Rent control wouldn't have to hurt this - your tenant's rent doesn't go up much, but your mortgage isn't going up much either. It's not like small landlords are in position to redevelop and increase density anyway, so I'm skeptical of arguments about housing stock if you limit the upside (and downside!) of small private landlording. It's often pitched as the most productive investment strategy for the middle to lower-upper class. Get one property, leverage it into a second, leverage more rents into a third, etc. Even in tenant-friendly states! Yet it's literally just rent-seeking and landlords riding along a wave of demand that they help create (by leveraging their properties and rent to acquire more) to squeeze higher and higher rents out of people is not particularly economically productive overall. Covid is the first real blip I can remember that's hit those landlords so hard, but the truth is many of these people are over-leveraged and were in a precarious position to start with given the risk. Let's say there were no eviction bans: they could evict all these folks not paying their rent, and ... try to rent out the units to the people that got evicted by other landlords? Because they couldn't afford the old market rate in the first place? Doesn't that just depress the rental market even more?

klipt 5y ago
> Yet it's literally just rent-seeking That's not the economic definition of rent seeking. > and landlords riding along a wave of demand that they help create Demand for owning, yes. But for renting they create supply, not demand, in effect helping lower rents.
- majormajor 5y ago
  > Demand for owning, yes. But for renting they create supply, not demand, in effect helping lower rents. No supply is created by person A buying a rental building from person B. Person A paying a higher purchase price does nothing good to the rents charged in that building. Yes, there is no lobbying or current manipulation of the government, but for small landlords it's often just a game of "I want to take advantage of population increasing over time to make more money over time" coupled with "I want to take advantage of other people improving the economy so that I can charge higher rents as incomes increase." Neither of those are productive, and the latter is hard to avoid calling parasitic. They don't have the ability to redevelop into higher density, or often even do much to change the condition of the property. So you get small mom-and-pop rentals in SF or similar places that charge far higher prices for far shittier units compared to those put on the market from larger developers or management companies in, say, Marietta, GA.

rcpt 5y ago

> old apartment > California Prop 13. Your friend is doing just fine.

humaniania 5y ago

Why would you care about the risks of being a parasite on vulnerable people?